5 Fears That Jeopardize The Future of Your Business

ID-100231153Like many proprietors, you probably have a vision for your future. Perhaps you picture yourself golfing in the sunshine, or sipping a crisp chardonnay while overlooking your retirement home in Hawaii. However, like many business owners, you probably haven’t given much thought to the path between now and your ideal retirement.

If this is the case, you could be on the fast track to an involuntary sale of your business due to unexpected illness, death or financial troubles. You want to have control over when and to whom you sell or transition your business ― which can take years to coordinate effectively. So why are business owners afraid to start succession planning now?

1. Fear of Losing Money

You have worked hard to build and establish your business and it’s perfectly normal to fear something causing you to lose it. You may also have concerns that your children will have differing ideas of what are necessities and what will waste profit in your business. Avoiding these issues won’t eliminate them. In fact, it may only make them worse.

2. Fear of Losing Control

Whether your business is well established or just getting off the ground, you have put in a great deal of energy to build it. If you feel that the business is your life ― and perhaps that no one else can run it as well as you have ― you may be resistant to letting go.

It is especially important for business owners to express these fears to their advisors and families. Transitioning the business gradually can help owners ease out of full control and allow time for their successors to learn the ropes.

3. Fear of the Unknown

In my experience, people just don’t like to talk about succession planning in general because they’ve been successful in their business and they’re moving into an area where they don’t know what’s next for them. A lot of the business owners we deal with feel that they are losing part of themselves and being forced into something they don’t necessarily want.

By not talking about it they don’t consider what their children might want. They end up either selling or shutting it down and that leads to family conflict. Which brings us to our next point…

4. Fear of Conflict

If you run a family business, differing views can cause family fights. You may not see eye to eye with your children on operational issues, or on the vision for the future of the business. When multiple children are involved in the business, you may be concerned about choosing one over another to take over, or that your children will not be able to work together without you.

The most constructive way to mitigate this fear is to establish a mechanism for communication between you and your family members, such as regular family business meetings.

5. Fear of Negative Implications

Succession often implies retirement, and retirement involves being removed from service. You may be years away from this reality and not ready or willing to think about stepping down. Alternatively, you can plan for a transition, which is positive and focuses on the bigger future, allowing you to engage others in the process.

The more you plan now, the less you will be daunted by fears and uncertainty regarding the future of your business. The earlier you communicate your vision and discuss the views of your family members and key employees with them, the smoother your transition will be. Starting the transition process now will allow you to plan for bumps in the road, help your successors gain further knowledge and experience, and attain your objectives for a better future.
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One Response to 5 Fears That Jeopardize The Future of Your Business

  • Ken I always appreciate your insights, and seeing your blog here today I am encouraged that we can identify these issues and work forward on them together …ie. the business owner(s) with their respective family members, together with their advisors.

    Funny that I was publishing on a similar vein at the same moment yesterday. You can see further at http://guaranteedincome4life.ca/blog/4-barriers-keep-business-owners-retiring/

    Ken I like particularly that the 5 fears you have outlined can be — with proper care — resolved in perhaps 100% of situations where people are willing to address these issues. They are not insurmountable. Your care, and the nature of your practice Ken, can overcome all such fears and concerns if people are willing.

    Family dynamics, and the role of personal identity and life-purpose, can especially impact the course of a business’ sale or succession.

    Thank you for sharing, Ken. I hope many will contribute their comments and insights here …you’ve opened a vital discussion.

    Best to you always,
    BW

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