This brief summary highlights three of my views on the dangers associated with not having a business continuity plan.
- A company could fail with an ad hoc, non-documented plan of succession strategy. The reality of a business valuation tumbling is only accelerated in situations where unplanned exit plans don’t exist. Because it is unplanned, you become reactive, instead of proactive. Having the comfort of time to put together the appropriate strategy for your business will seem like a luxury when you are scrambling to try to salvage your business.
- Stress rises prior to ownership change. Having no plan creates confusion for the management team, employees, clients and vendors. That confusion could create a major risk. Lack of management and ownership communication to the rest of the company and those invested parties outside of the company could cause significant uncertainty at demanding times when tension is already high.
- A company’s value is open to differences of opinion and could create major disagreements between parties. Unfortunately, the unplanned current owners are targets. Their company could very well be acquired at a deep discount. Is that what everyone worked so hard for all those years? Probably not.
To learn more of my views about risk, contact me to discuss. One parting thought…
Owning a business is a vocation that serves communities. Corporate Responsibility is important by itself, not because the ends might justify the means. Sustainability of service must have direction. Without proper planning, community service from the private sector will evaporate.