The bookstore in my town has announced that it will be closing at the end of June, after 23 years in business. Given the societal and economic shifts that have occurred since the emergence of internet retailers and e-books/readers, it is not a shock. If one of the largest booksellers in the country closed its doors, what chance does a mom-and-pop in a small country village have?
My family and I are emblematic of the problem, I suppose. We frequently buy books; in fact, we organize a book club for Capital Region businesspeople. We have patronized the store, but certainly not as much as we could have and obviously not enough to make a difference.
I don't know the proprietors personally, and the reasons they stated for closing go beyond just business economics. There are personal and health issues involved. So they have announced a wind down. They're shutting down in a planned process, on their terms.
If there's a proper way to go out, this seems to be a good, if not satisfying, conclusion. It's not always the case.
Ninety percent of the 21 million US businesses are family owned. Yet only 30 percent of family run companies today succeed into the second generation, and only 15 percent survive into the third, according to SBA.gov. According to some studies, fewer than 30% of small business owners have a succession or contingency plan. That's a lot of assets at risk.
If your desire is for your business to survive you, what's your exit plan? Is your business prepared to close its doors? It may be a fait accompli if you are not there.
- Could your partner, spouse, sibling, or child run the business, even if only to wind it down in orderly fashion? Are there instructions for doing so?
- Do you have a contingency plan? A succession plan?
- Is your business sellable? Have you had it valued?
- Is your will up to date? When was it last updated?
- Are your assets protected in a trust?
- Do you have a lawyer experienced in business transitions and transactions?
- Is your business protected with the appropriate insurance?
That's a lot of tough questions, but necessary ones. You've spent years, decades even, building your company. Life can change in an instant, as we were reminded several times this week.
Will it be it sunrise, sunset or shutdown if you are gone? Planning can help answer that on terms you choose.