It’s almost Halloween: fall’s in the air, ghosts and goblins, action figures, and princess costumes in the stores, parades of trick or treating kids with parents in tow in the early evening — quite the scene where I live in Boulder, Colorado. I always prepare and try to be home. We decorate the entry, buy candy (my favorite kind just in case there is some left over) and get a stack of $2 bills for the kids on our block. But some years, an interesting thing happens. No one shows up! Despite my anticipation and planning, the evening is like any other.

This pattern of planning, anticipating, being ready just in case, despite the knowledge that what I am planning for probably won’t happen, is pretty normal for me. I ask myself a lot, “What If___ happens — am I prepared?”

Let me give two more examples.

1. Last spring we took a three-week trip to southern Africa. We had a fabulous outfitter make all the first-class arrangements. Still we had to prepare by getting the required shots, acquiring some special clothes, and doing those mundane tasks like stopping the mail and newspapers.

I also asked “What If…” one of us gets really sick before the trip and we have to cancel? Or a major emergency happens during the trip? Or the single-engine plane we will be on for half of the trip crashes? My contingency planning kicked in. We bought travel cancellation and medical evacuation insurance. I updated my will (a bit out of date I learned) and made sure my family knew where to locate it as well as the name of my attorney. I emailed our itinerary to friends and family, just in case….

Did we complete the trip without incident? Of course, as with Halloween night, the trip was like all our trips, lots of pictures, no problems.

2. In a week I am having hip replacement surgery. Contingency planning hits a record level for me when fear and anxiety kick in. “What If…?” looks like everything from ensuring my Advanced Medical Directives are in order, to making sure all the bills are paid, to calling my family to chat and tell them I love them, to washing the car and filling the tank (in case family comes to town for my funeral and they need to use it). Oh, and I am writing this blog post a week early, just in case….

The Business “What If…?”

This is a long way of saying that we all, as business owners, need to ask the “What If…?” question about the continuity of our business ownership and operation, even though things are running well, you and other key employees are healthy, and your future looks bright.

But of course, few of us do this contingency planning. Here are some scary/spooky facts.

  • Only 25% of family business owners entering their senior years have completed any estate or succession planning.
  • Only 58% of small businesses have key person insurance.
  • Only 38% of privately held businesses have buy-sell agreements in place.
  • Only 64% of owners have estate plans.
  • The average time since these documents were updated is between 10.6 and 12.8 years. (Sources: Grant Thornton International Business Owner Survey; Prince & Associates Survey; PriceWaterhouseCoopers; VIP Forum research; 2007 Kellogg Family Business Conference)

We’re not talking about Halloween and candy here.
Whether you are a partnership, a family-owned business, an LLC, or sole proprietorship, you need a plan for the continuity of ownership and your business. You need to ensure that the assets and wealth you have spent your life building transfer as you envision.

Eleanor Roosevelt said, “It takes as much time to wish as it does to plan.” And while the average business owner spends 80 hours annually preparing an annual business plan, they spend only six hours preparing for their exit.

What can it hurt to plan? (As for me, my personal planning means I might have some of my favorite candy available when I’m recovering from a successful hip surgery!)

We all exit our businesses. Maybe not today or next week, but can you answer the question: What If….?