By Maurie Cashman
Preparing for tough times is something that makes a lot of business owners uneasy. By their very nature, business owners are an optimistic lot. If they werenâ€™t they would not have gone into business in the first place. However, this is a case where your biggest strength is your biggest weakness. By being inherently optimistic and also hard-working, the typical business owner often overlooks one of the keys to long term success. That key is being prepared and positioned to deal with tough times.
The tough times I am referring to are not those inevitable times in business when things are not going well due to economic stress. The tough times I want to talk about today are more personal in nature.
â€œA good leader can hold his or her emotions in check, especially in tough situations.â€ – David Moore of Addison Group
During the past week I have had a couple of difficult conversations with friends and customers. One of these friends is a financial planner who was feeling a bit down, which is unusual for him to express. It was Tuesday and he had already had three conversations with clients who had gotten dire diagnoses from their doctor, including one with stage IV cancer that they had known nothing about. Everything was just fine until this bolt from the blue. He was concerned as to whether his clients had done an adequate job of preparing for these tough times, despite his best efforts.
I had a conversation myself with a customer last week. Neviâ€™s brother owns a business that he built up over many years. One day about a year ago he had a massive stroke. He was in his mid-fifties. He had made little plans for how the business would be handled in the event of a tough time like this. Thankfully he survived but he is permanently disabled. He likely has life insurance, but this is of little use in this case. He was hospitalized for an extended period and will likely never be able to care for himself without support. He now lives with Nevi and her husband, and Nevi is providing long-term care. On the day I talked to her, Neviâ€™s husband was going to see his doctor due to heart problems. He has had two open heart procedures in the past, and her brother was having problems with blood pressure related to his stroke.
Neviâ€™s brother is blessed to have a sister who will take him in and provide care. But it was obvious that caring for both her brother and her husband, not to mention the uncertainty of their futures were taking their toll. Neviâ€™s son had left his job to come back and run the company in his uncleâ€™s absence and is doing a good job. However, it is not apparent that this is what he wants for his future.
Nevi stated that they were trying to simplify things as much as possible to try to survive these tough times. Preparing for times like these had never occurred to them. It was a tough emotional time for her brother, who had always been self-reliant and seemingly had things under control. Suddenly all control had been taken from him.
We are never certain what may be right around the corner. As we and our families age, one thing seems certain. We need to prepare mentally and financially for some tough, perhaps jarring times. A few things to consider:
- Have you chosen someone capable of operating your business in the event you are incapacitated and communicated this to those who need to know?
- Do you have long-term disability and long-term care insurance in place?
- Do you know if you are reliant on either the income from or the sale value of the business in order to pay for tough times?
- Do you know what your business is worth? Do you know how much you need it to be worth?
- Can you count on those you have chosen to carry on to be there? What have you done to provide them an incentive to stick with the business during tough times such as these? Are you relying on their loyalty?
The answers to these questions may be the difference between whether you can realize the value of your business, either via cash flow or via a sale and whether you will simply have to close the door. Preparing for tough times can make those times much more manageable for you and your loved ones.
May God bless Nevi and keep her strong. May God grant you the wisdom and foresight to prepare for tough times.
Â© 2016 Aspen Grove Investments, Inc.