It’s critical that if you’re going to achieve your goals that you have realistic plans that work. This means connecting the dots. Where are you today and where do you want to be? How do you work backwards from where you want to be to where you are? What intermediate steps need to happen to build the bridge from where you are now, to where you want to be? What does that path look like?
It’s important in the planning process to understand that just because you build a plan, doesn’t mean that circumstances are going to happen exactly that way. There will certainly be intermediate steps and situations which will intervene, and part of your plan needs to be planning for contingencies. Some contingencies are so common and so frequent that they should be in almost every plan. When I work with business owners developing their plans, I look at their situations and we certainly plan for anything that’s unique in their business process or life.
We also almost always have to plan for the four D’s – Death, Disability, Divorce, and Disagreement.
#1 Death. It’s 100% inevitable that all of us will die and we need to have plans in place to make sure we understand how the businesses interact with death of an owner or control party and how the business continues in the event that the owner or one of the partners dies.
#2 Disability. How do we make sure the business moves forward if one of the key people in the business becomes disabled or unable to work?
#3 Divorce. What happens if one of the business owners gets divorced? Their ownership of the business is probably going to be a part of the estate in the divorce, so what will the court do with it? What will the ownership look like? What will the business look like afterwards?
#4 Disagreement. It’s inevitable in the lifecycle and growth of a business that the business owners may disagree about where the business is going to go. What do we do about that? What process do we have in place? How do we end a disagreement and keep the business moving forward? We probably want something different than the Fertitta brothers who own the UFC organization – as it grew from $2 million to $4 billion in value — they agreed that if they were ever in a disagreement, they would have a physical fight with one another in a cage match. Fortunately there are other common ways to plan for the possibility of disagreement.
It’s critical if we’re going to have success that we have plans in place, and those plans need to anticipate the real life bumps in the road. We need to look for those likely scenarios and make sure that our plans keep the business and the objectives moving forward, regardless of short term disruptions.
How has your planning worked out for you? Let us know in the comment section. We would love to hear from you.
This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.
About the Author
Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC. His signature keynote, The 3 Laws of Empowerment (www.rshawnmcbridelive.com) , gives audiences an entertaining look at how they can prepare, plan and protect themselves. You can reach R. Shawn McBride at firstname.lastname@example.org or (214) 418-0258.
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