What Denver Small Business Owners Can Learn from Coach Kubiak
The resignation of a leader, especially one who has been a team player and responsible for the team’s success, is always a blow. Denver small business owners may, on occasion, think about what would happen if they were no longer able to lead their team, but most of us prefer not to dwell on it. That is understandable, as long as you have a succession plan in place. This post will discuss planning for succession, and making sure your business can succeed without you, whether you step down by choice, or because you have to.
Small Business Succession
In football, there are many people other than the coach and players who are invested in seeing the team succeed. In fact, replacing the coach is a fairly common practice. Coach Kubiak, who is a former Bronco and helped lead the team to the Super Bowl, was not expected to leave at this stage of the game. Unlike the Denver Broncos, you may not have a general manager, other owners, or anyone who understands your business well enough to take over tomorrow if needed, so small business succession is a little more complicated (believe it or not) than changing coaches in the NFL. Plus, the legal form of your business may not support a smooth small business succession plan, even if you have a vague idea of who could or would step in if you couldn’t lead your team. What if you have to leave your team unexpectedly, and at a time when they need you? Is anyone prepared to take over in your absence? Is there a plan in place?
Succession and Business Form
You already know you had to choose the legal form your business would take when you started it. You may have decided on the legal form of your business based on tax strategy, or ease of formation, but you might not have considered succession and business form when choosing how to set up shop. Do you know what would happen if you or your estate needed to transfer the business to a new owner unexpectedly? The good news is, that regardless of how your business is structured (for the most part), there are ways to transfer it to another party if necessary. I cannot stress enough how far a little preparation now will go toward saving your loved ones a lot of grief and stress if you have a legal, written plan for the transfer of your business, no matter what the legal structure is. In coach Kubiak’s case, he was able to discuss the transition with his team, his General Manager John Elway, the other coaches, and the team’s owners, the Bowlen family. It’s also likely that his contract with the team described in detail what would happen if he resigned. While this is an ideal scenario in a less than ideal situation, this is not always how things go. An accident, or sudden, serious illness can leave you entirely unprepared to plan the transfer of your business. Why not take some time now to put a plan in place?
Planning for an Unplanned Succession
Most of us have a vague idea of what we would like to sell our business for someday, or which of our children we think would enjoy running it for us when we are ready to retire, but we see that plan getting put into place down the road. If you are reading this post, it is possible you have not done much preparation for an unplanned succession. As an attorney, I see this scenario more often than not. Here are a couple of things to ask yourself about an unplanned succession:
- What if you couldn’t make your wishes known?
- Are your wishes in writing somewhere? Are they current, and properly structured?
- Are there people who may argue (specifically, in court) about what your wishes are, if you are unable to make them 100% clear?
The legal expenses that can accompany arguments about who was supposed to do what with your small business should you pass can destroy not only the business, but personal assets and family relationships as well. The best thing you can do is sit down with your Colorado small business attorney and ask what would happen tomorrow if you had to announce to your team that you were leaving, effective immediately. Or worse, what would happen if you passed due to an accident or sudden, unexpected illness. As an attorney, I don’t like asking people to think about these scenarios, but I like it even less when a I see a family trying to figure out how to hold a business together while they are grieving.
Denver small business owners can learn from Coach Kubiak; you may not want to stop leading your team, but there might come a time when you have to. None of us like to plan for the worst, but when we do, we make things much easier on ourselves, our families, and our successors. If you need help thinking about succession and planning for the smooth transfer of your Colorado small business, please contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Attorney. Phone: 720-258-6647. Email: firstname.lastname@example.org
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