No one wants to think about their own mortality. But a proper business model must also include such possibilities. Insurance policies – life, medical, property – and most importantly, a succession plan are all predicated on this simple truth.
Planning for your business to carry on without you is not just an idea in case of the death of a business owner or partner, but can be important in preparing it for sale or a merger. In today’s ever changing world, never forget that information is just as important, if not more important than, the tangible assets a business needs to operate. Website, social media pages, passwords to various equipment and processes, are all vital assets that increase – or decrease, if lost – the value of the business.
Don’t run your business in your head. A business should always document the information necessary for the business to operate without you. This is important not only from business continuity but also for employee training.
Events that can adversely affect a business come in all forms, including:
- Death of the owner, or one or more business partners
- Natural disasters including fire and floods
You can lose value in the business, whether you sell the business or not, if you don’t properly document your processes and procedures for it to operate without you. These documents should cover the entire business process from product development/innovation to employee training and retention to customer acquisition and servicing. With proper planning, the business can continue to operate and thrive, even without the current owner around to see to it. Whether through death or sale, a well-run business will be positioned to move forward or be sold for a price necessary to meet the needs of the business owner.