Lately, business owners are not strangers to big-time challenges. But whether a change is brought on by mass economic upheavals like those that result from a pandemic, or an owner has left or died, the life of your business may depend on how you respond to the change. Some challenges may require major adjustments on your part and the part of your family.
Responding to economic calamities
In the event of a crisis that threatens the financial well-being of your business, there are a few things you should consider in your response:
- Know your assets – This change may require your business only holds onto the assets that have long-term value.
- Consider reshaping your model – The structure of your business may suffer during this time. What are your other options?
- Adjust your strategy – Be open to change. You may have avoided certain borrowing limits prior to your current challenge. Perhaps it is time to revisit those limits.
- Communicate – Finances aside, how your business maintains a strong backbone may rest on how well everyone involved communicates with one another.
The need for a good succession plan
Not every major blow is the result of economic struggles. The death or resignation of an owner, in the case of a family business, may take an extra toll on those involved. Succession can be a grueling process, and it can lead to unnecessary conflict among loved ones.
Your business can benefit greatly by developing a thorough succession plan. If possible, prepare an individual or group to stand in for the owner until the time is right. Some families hire external trustees or similar entities to facilitate business matters.
Your response to great change could mean the survival—or even flourishing—of your company in the future. Reach out to a business law attorney to learn more about your options.