This is something I find many business owners don’t want to think about. Yet, it is so important and part and parcel of having a great business and one that is saleable.
O.K., so you know you need an up to date will, right? But what else do you need to have in place in case you get hit by a bus or can no longer run the business for any reason?
Here are the things you need to plan and prepare for in a situation where you can longer run the business. This information is adapted from a book called Hit By A Bus by John Broons who is an educator and consultant, to and for families in business, working with them to understand the intricacies and dynamics at play in a Family Business system which differs greatly from a corporate structured business. It applies to all small businesses.
- Money – who will have access to bank accounts, the bookkeeping system, investments etc. Will bills get paid and GST be lodged and paid? Will salaries and superannuation be paid on time?
- Codes – for example, for security systems and building access.
- Internet – who has login and password access to internet banking, websites, social media, supplier sites etc.
- Keys – where are keys kept? Who has access to them? Think about buildings, storage units, plant and equipment, safes, motor vehicles and so on
- Contracts – are there contracts in place with clients or suppliers that would no longer be valid without the owner. Are there any personal guarantees in place?
- Intellectual property (IP) – Is there any intellectual property, trademarks, patents, designs, copyrights, logos and related items that are owned by an individual owner or company?
- Key People – do you have documented and current details of key people such as executor, lawyer, accountant, personal and business banker, insurance broker or company and so on?
- Control of the business – who do you really want to take control of the business? Do they know and are all the appropriate authorisations in place to enable that?
- Documents – are all crucial documents stored in a safe place off site? Who knows where they are?
- Legal – do you and any other owners have up to date wills? Are executors aware and have access to all necessary documents, passwords etc? Are there Powers of Attorney set up and has the person to whom it has been assigned signed the document?
- Owner dependence – one of the big issues with an owner leaving a business suddenly is what happens to their relationships with key clients, suppliers, joint ventures, landlords etc.? Also, is there expertise and knowledge in the owners head that needs to be documented? Separating the business owner from the business is a key step to making the business a saleable asset and enabling it to operate without the owner.
It’s not pleasant thinking about what if something major happens to the owner or owners. But it is critically important to get everything in place so that whoever has the responsibility of taking over, can do so with minimum stress and difficulty. It’s usually a very stressful and emotional time anyway, without making it worse by being unprepared.
John Broons has developed an online course called Hit By A Bus which goes in to detail about questions you need to ask yourself and your business associates (accountant, lawyer etc.) Your business has probably been a big part of your life and is a major asset. Don’t risk losing your investment and do the course which you can access at Hit By A Bus – Online Course. (As this is an affiliate link you can read my Affiliate Policy here.)
I work with business owners to help them turn their businesses into saleable assets and addressing the items listed here is all part of having turning a business into a saleable asset. A business that’s ready for sale is well worth keeping!