Owner managers are highly motivated, talented & skilled in their particular field. However, sometimes they can overlook some very important responsibilities.
Business owners have responsibilities to a huge network of people and organisations, not just limited to their staff, customers, suppliers, debtors, creditors, landlord, bank, HMRC, statutory, and most importantly family! And the list goes on.
Have you, as an owner, ever considered what would happen to your business if were unable to work for a long period, or worse still, ever again?
If you answer ‘no’ to any one of these questions then you could find you, or your company, ill-prepared to tackle critical issues if you’re not there.
- Are you a sole Director or shareholder? Do your articles of association allow for such an eventuality?
- Is there a management team in place, or a second in command to allow the business to continue in your absence?
- What processes and procedures exist, allowing for business as normal?
- Where is the IP kept? In many cases, the owners head!
- Who is on the bank mandate? allowing payments to be made.
- Relationships with key customers, suppliers & other business contacts?
- Key man insurance, business continuity insurance, asset finance insurance. Are they in place and relevant to your business needs?
- Personal insurances, allowing your family to survive in your absence?
- Do you have a plan of action, written down & shared with your colleagues? If not, why not?
A pertinent story of how important business fail-safes are is that recently I was asked to attend a meeting with the family of a business owner who had been tragically killed in an accident, just one week prior.
It was a nice manufacturing business, with a good reputation, building itself a strong asset base, well on the way to owning its own property, being debt free & making consistent profits.
The owner was a ’Superstar Owner Manager’, at the very heart of a ‘hub and spoke’ run business. Despite the company producing excellent, in-demand products and having a 12-week order book, it was forced to close its doors just 2 weeks after his death & prior to his funeral. We even had someone interested in acquiring the business. Unfortunately, the owner had not addressed any of the questions asked above.
As a result of ill preparation not only has a wife lost a husband and a child a father but his wife & child have to survive with no income. As well as this, mum & dad lost their investment in the business, there is an empty property with no tenant but a mortgage still to pay and worst of all 12 people out of a job.
The circumstances were utterly tragic, but it happened, BE PREPARED!