Your dream was always to be your own boss and run things yourself. You had the self-confidence, resources, ideas and passion for this activity and the support you needed from your family to do this. Retirement or an exit from the business was really never in the forefront of your planning thoughts, so you went about your daily, monthly and annual duties as if "trees grow continually to the sky"!
Success followed you throughout the typical ups and downs of an entrepreneurial venture and you had a good time and made a living you and your family could be proud of. Over the years many changes occurred that held your interest. You maintained the business growth on a reasonable basis and lo and behold you have paid all the debts, possibly acquired the real estate that housed your activity, but in the "effort and grind" of daily activities you did not take into account what could happen to all of this. After all your best friend was in the business with you and yes you had both agreed to a buy out plan, had it drawn up at the beginning and even had insurance to help pay for it all. Only one thing you neglected to do and that was to sign and execute the document.
THE 4 D's should be considered as all are out of your control but any one of them can and will bring a good business to its knees.
Unbeknownst to you or your best friend and partner one day he's in for a routine medical procedure and a disaster occurs and he dies unexpectantly. Oh well you have this agreement. But wait it's not been signed, so what could possibly happen?
You are in the business by yourself and one of your passions is playing baseball which you do on weekends and during several tournaments during the year. What a blast and as you've taken good care of yourself physically and are working and playing hard. Then on the way to a game your car is blindsided by someone and you have been seriously injured and will be lucky to live much less be able to work again. Now what happens? Maybe not much and therein lies the mess.
Ok you've now run this business for over 40 years and that's 100% of your adult life. Your spouse has somehow put up with you being gone all the time as the financial benefits have outweighed the absences. But what you might learn is that your spouse took you for life but not for lunch! So, you wake up one day and realize that you're not getting to the office until 10:00 am and wondering who you will have lunch with that day. Sales have remained steady, but not a lot of growth as you have a good staff, but your level of interest has waned over the 40+ years at the same desk, in the same office and the same building. In other words stagnation.
Hurricanes, tornados, fires, floods etc. we've all seen what they can do to us locally, but never in most of our lives have we ever seen the results of this pandemic. Hopefully this too will pass, but there will be countless businesses that will never re open again. Until there is a "cure" or a "vaccine", so many people will be hesitant to take up their lives again as they were. The restaurant industry is the one that comes mostly to the forefront to me at this time as it's one of the largest industries and employers in the USA and by far one of the hardest hit. Yes, there are some businesses that thrive in a crisis but that's not the norm. So, as you go forward it's always a good idea to maintain a conservative approach to many aspects of your business and I always say, "keep your powder dry", because if you run out of cash you typically are out of business.
The 4 D's refer to the old adage either if you fail to plan you can plan to fail. At Business Brokers of Texas, we offer consulting services, valuations and help you prepare to sell your business in order to maximize the selling price and minimize when it's time to sell.
Contact us today for a no obligation, free 30-minute free consultation.