FAMILY DYNAMICS / GOVERNANCE
Over the last few months, I have shared blogs about the 5Ds of Life – five life events that can derail your business – and cited real-life examples. The importance of preparing for these events in advance cannot be understated.
Here are the cliff notes:
Death: The passing of an owner or a close family member with inadequate directives in place
Disablement: Equally devastating, a disabling event requires even more future planning
Divorce: Any union within the family circle has the potential to disrupt the business
Disagreement: Without governance, family feuds can ripple into the business
Distress: The hardest one to anticipate, stability comes from building a strong foundation
What is the mistake most family business owners make?
Answer: Thinking “THAT won’t happen to me.”
What is the question proactive owners ask most often?
Answer: “How do I start planning when I have no idea of which of these events could impact me or my family?”
I have clients start by asking themselves:
If I were completely removed for the next 3 months, how would the business run?
Who would oversee making business decisions?
Do they have access to the right information and accounts to make this possible?
If I asked the leadership team what the plan was, would they all tell me the same thing?
Are there any other key positions in the company that should have emergency plans?
Should the unthinkable happen, these thought-provoking questions are intended to get the ideas and conversations flowing around the decisions, documentation and resources needed to protect the business, owner assets, the family and employees.
ACTIONS TO TAKE NEXT >>>
Develop an Emergency Management Plan (EMP). This document clearly spells out roles and responsibilities should you become unavailable to lead.
Bring in your team of advisors to ensure that you have explored all the bases and have yourself covered. These advisors most likely consist of your Business Attorney, CPA, Estate Attorney, Business Consultant, and Financial Advisor. Get everyone on the same page.
Communicate with those who are going to be involved in executing your EMP should it be needed. This could key people on the leadership team and the family. When this is done this correctly, the answer to question #4 above should be a resounding “YES”.
To dive back into any blogs you missed, just click on the topic above or visit our website.
NOW for the 5Ds of Life Challenge!
My challenge to every business owner reading this blog…assess your business’s readiness to handle a 5D event. It’s a simple yet revealing exercise.
Download the 5Ds of Life eBook
Take the assessment on page 2
Share with your team & family which area(s) poses the most risk to the business
Book a free coaching call with me to discuss your findings
Ironically, while we know these are topics that can impact anyone of us, few owners take all the steps necessary to prepare for the unexpected.
It’s not a question of IF, it’s a matter of WHEN and HOW.
Trust me. My family’s business experienced 3 of the 5.
How can I help you?
Need a sounding board for a different family business challenge you are facing right now? Please reach out to me via DM, email or tap on this link to book a call.
No fee. Just a fresh perspective.
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