Strictly Business

Wednesday, Mar 26 2014 02:00 PM

RUSS ALLRED: 60 days in paradise first test of business succession

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    Russ Allred, business consultant and author at Sunbelt Business Brokers & Advisors.

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BY RUSS ALLRED Contributing columnist

Perhaps your paradise is in Europe or Asia, high in the Sierra Nevadas or the depths of Death Valley. You may find heaven on the beaches of Cancun or the heart of New York city. Wherever you find Eden, it should be in your business plan to spend at least 60 days there.

Contrary to popular belief, the proof of your success as a business owner is not how much time you spend in the office, but how much time you can spend away and still make money. Before you envision a business sale, enjoy a dream vacation.

You need to spend enough time away to test your system of ordering, receiving and paying for product. You need to test your accounting system to ensure that your financial statement will be prepared and bank statements balanced. Your personnel must be proven to come to work and complete assignments without your presence. Your managers should have time to show they can handle glitches and tragedies. Without the sufficient passage of time, you won't have confidence that your business can last without you.

You may ask, "Why does it matter if my business has staying power." Capital is hard to come by and commercial loans are rare. Most business sales require the owner to finance the sale. If the buyer defaults, you may have to sue to retrieve what is left of your assets. A sustainable business is more likely to pay you debt service and keep you out of court. If your exit plan suggests succession, then your staff must be trained and capable of paying your retirement.

An extended stay away is also support for your sanity. What will you do in retirement? Dynamic business owners often find that relaxing is aggravating and relationships have become rusty. It's best to test your hot buttons to see if you can handle a life of leisure.

First call a staff meeting and discuss what is necessary for you to be gone. You may also solicit the assistance of a guide like "Best Practices of High Performance Entrepreneurs" as a precursor to your departure. For many who read this article, even a few days vacation is problematic. Your business would die without your presence. You should begin with the guide "Ten-Minute Retreats for Business Owners" and get in the habit of short breaks to refresh your business resolve.

Russ Allred, MBA, is a business consultant and author with Sunbelt Business Brokers & Advisors. These are his opinions, not necessarily those of The Californian.

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