Can You Run Your Business from a Hospital Bed?
A few years ago, my father suffered a stroke. Fortunately, it wasn't major and so after spending about 10 days in a hospital ward, he was moved downstairs to the rehabilitation section to begin transition therapy that would prepare him to move back home.
In the bed next to him was a successful small business owner who had also suffered a stroke, and was in rehabilitation. But, instead of being able to focus on getting himself better, this man was in his hospital bed, making local and international phone calls to try and keep his small staff working and his business afloat. It was sad to see him attempting to do the dialing and the negotiations in his "stroke victim" condition.
The latest addition of Profit magazine has an article discussing 5 major issues that Canadian Business will have to face in the next 5 years. Number one on that list is the issue of Business Succession Planning. Who will run the business when the owner decides to step down in the next few years?
This question of business succession is very topical and assumes that the owner is thinking in terms of some orderly wind down in his or her day to day duties. It assumes that there are second line management, or children, who are in training and being prepared and groomed to take their rightful place and step into the shoes of the entrepreneur.
Or, it assumes that the right buyer will walk in at exactly the right time with exactly the right sized cheque. Hardly likely.
But this question of succession also assumes that it will take place some time in the future, and that everyone will have all the time that is needed to get prepared.
But what if we don't have that time? Every business owner will some day Exit their business. And that Exit will be either Voluntary-at a time that is right for them: or Involuntary due to death, ill health, reduced profitability or some other external factor. All of us like to think that we will exit on a volutary basis.
Before my father left and was able to move back home, this man was in the process of looking for a buyer and trying to sell his business from his hospital bed.
While Succession Planning is important, what the man in the hospital bed had neglected was a "Contingency Plan". Contingency planning carries an element of immediacy, and asks the question: "What would happen if you had died, become critically ill or disabled last nite?"