Oh my, have the chickens come home to roost. Look around you and you can see it everywhere. From politicians in hot water to a lifetime of not taking care of yourself resulting in a heart attack, it happens.
Take Mike’s situation. For the years that his parents owned and operated the company, they used the company as if it were their own personal piggy bank. They resisted reinvesting in systems and other aspects of business that would make the company more sustainable. They also lacked to save their resources outside the business so when it came time to retire, they needed as much as they could get as a purchase price for the company. They sold it to Mike under terms to their advantage. Fast forward to when Mike finds the company to be cash-strapped because of this obligation to pay out his parents. It becomes a spiral because he doesn’t have the resources needed to keep the company competitive. Ultimately, this threatens the sustainability of the company and his parents’ cash flow. A triple whammy. Now, it’s really not Mike’s fault. It’s his parents’. Those are some clucking ugly chickens coming home to roost.
When you consider that, according to the Exit Planning Institute, 50% of all business owners are forced out of their ownership due to unforeseen circumstances such as death, disability, divorce, disagreement, or distress, ensuring that your company is always ready for transition is the ultimate protection against the ruckus chickens make when they come home uninvited.
What does “ready for transition” mean though? For a company, it means that the company is managed and operated in such a way that it can thrive and survive no matter who owns it, who its top customers and suppliers are, and how fast its growing. It means that there is an experienced, qualified management team navigating the seas and systems in place to deliver consistent results to customers, employees, and other stakeholders.
For an owner, ready for transition means you have a plan and resources in place to weather what comes next, whatever it is, because we never really know what might be around the next corner. You have goals you’re working towards and resources you’ve saved in line with those goals. You’re nurturing a variety of interests and relationships outside of the business. There’s a balance, or at least progress towards balance. And when you decide (or are forced) to exit stage right, you can do so seamlessly into your new roles or adventures in life.
And then there’s readiness as a human. Of course, taking care of our own health is the crux of all readiness. Without our health, we’re sunk. Regardless, unforeseen stuff happens. A loved one’s health fails, or the proverbial Good Humor truck takes you out.
To guard your nest egg, I recommend three ways to protect yourself from the chickens coming home to roost:
Invest the time to make sure you have a contingency plan written out for your loved ones to refer to if something unforeseen happens. This document outlines where the important papers are, who are the advisors and other key people inside the business and outside the family that should be contacted or have been assigned important roles in the face of the crisis. What accounts, ranging from bank or business accounts to your computer and online systems, should people be aware of and able to access and manage on your behalf? For business owners, the document goes an additional step further and outlines your wishes for managing the company during the crisis and ownership should you pass away. As morbid and depressing it is to consider these eventualities, don’t chicken out. Preparing this toolkit is an ultimate gift to your loved ones.
Do you have a personal growth plan? What about a personal financial plan? If yes, congratulations! Hopefully, you’re checking in with yourself on a regular basis to monitor your progress and adjust your plans as life happens. If you don’t have one or both of these, stop being a chicken. You can start as simple as a weekly budget or get more sophisticated, tapping into advisors and others to help you. Progress is far more important than perfection. Take care of yourself.
When was the last time that you sat down as a team of leaders in your company and talked deeply about the strengths and risks facing the business? The most successful and valuable companies build this discipline into their routine planning process, allowing them to identify where chickens could come home to roost in the market, in their systems, and on their teams. It’s how they stay nimble and able to win. There are a variety of tools you can use for such a conversation. I find having an outside facilitator particularly effective in drawing out multiple perspectives and developing better buy-in for owning meaningful action plans.
I challenge you, as a part of National Chicken Month, to take steps to protect yourself from those chickens coming home to roost. (Yes, September really is National Chicken Month. Who knew?) By accepting the challenge, I guarantee you’ll sleep better and start each day a bit more “sunny side up!”
Download this free Business Readiness Checklist to get yourself started.
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