Check Out Checklist

Entrepreneurs generally don’t like to think about mortality – especially their own.  I recently had a situation that brought this home in a personal way. Running in the desert mountains is my happy place, and I had left before dawn and headed out for a one hour run on a rocky trail. Thirty minutes in, I tripped and fell. The good news was avoiding the cactus. The less good news were the rocks that shredded my hands, shoulders, hips and elbows.

Coming away from the experience bloodied and bruised, it occurred to me how foolish I had been to go out there with no one knowing I had gone, no ID or phone, water or first aid. Had I hit my head, the story might have ended much differently. Lesson learned.

When we talk with business owners, part of what we do is help them ensure they have covered the bases and been proactive in preparing for the unplanned. No one goes out thinking they are going to fall, have an accident or be hit by a truck. However, in the event the unexpected happens, we owe it to our families, businesses, and communities to have done a good job of preparing for what will come next.

Here is a “Top 10” version of a longer check list (24 items) we give clients to see test their planning. Not every item will apply to you perhaps, but I encourage you to go through and see where you are at in terms of being proactive and ready, in case you “check out” early. (answer Yes or No)

    1. Does your family and business have a shared vision for the future that will outlast you?

    1. Is your will current (last 5 years) with a Personal Directive and Power of Attorney?

    1. Is it clearly understood by all who will own the family assets/business in the future?

    1. Is there agreement on how the future CEO of the family business will be selected?

    1. Does the family business have an independent Board of Directors that meets regularly?

    1. Is the shareholders’ agreement current, and are there ways to fund exit without conflict?

    1. Have successors (family or non-family) been prepared to take over the business?

    1. Do members of the next generation been given options to be considered for being a managing owner, a governing owner, or an investing owner?

    1. Are strategies in place to minimize tax to the business/estate when you and your spouse die?

    1. If you are not here tomorrow, do the people who will need to run the company know what to do (where your documents are, access to vital company information, passwords, etc)?

If you scored 8 or more, you are in very good shape. Between 5-8 is normal (work to do). Scoring under 5 means you should dedicate some solid time to catching up and getting things in order.