What Happens When the First AND Second String Quarterbacks are Injured?
Those of us in Houston are acutely aware of what happens to a team when injuries occur to the first or even second string quarterbacks. We are proud of the Texans who happen to have a good third string quarterback who could take them to the playoffs. Admittedly he was not Eli Manning, the Texans would have preferred to not have to put him in the games just yet,but he was on the team and eagered and prepared to go on the field. A year ago the University of Houston faced a similar situation when in the same game they not only lost their quarterback who gained more yards in NCAA history, but also his backup. The freshman who had to step in obviously was not a Heisman trophy candidate at the point in his career, but the team at least had someone in mind who did a serviceable job.
Who is your second string or even your third string quarterback? Who will run your business if you are taken out for the season? Not only is it important to have clear lines of operational authority, it is never to early to think about succession planning.
Most business owners are busy trying to take care of the day to day tasks connected with running their businesses. Many have worked 24/7 doing the necessary stuff like producing and selling products, hiring people, paying bills, filing tax returns, doing other government reports, etc.. After building your business, it is time to think about who might take over if something were to happen to you.
In a perfect world you can work as long as you want, sell your business for lots of money, and walk away the next day. Unfortunately, this is not a perfect world. Transitions are not always planned. Heart attacts and auto accidents happen and those events don’t consult with the individual affected in advance. In addition, there are complex estate planning and estate tax issues. A friendly sale to a family member or a long time employee can be structured to minimize the amount that goes to the government. When some children are involved in operating the business, a structure can be created that allows those children to continue to operate the business while preserving the asset value to the others.
Large public companies can do things that mid market companies cannot do and vice versa. Small companies also have options that are not available to bigger ones. There are no cookie-cutter or stock approaches. Every situation is unique. Every business is different. Every family is different. We have a wide range of experience with businesses of all sizes and families, perhaps not all kinds, but certainly many. We can help you fashion a succession plan appropriate to your business, family, and employees.
As CPA’s who work with businesses of all sizes, we can help you successfully navigate the hurdles of transition and see that you are prepared should a disaster or sudden illness take you off the field. We can help.