The Business Transition Blog

Early Warning Signals

Imagine you lived and worked in Japan five years ago and knew with certainty that there would be an earthquake and tsunami in 2011. Imagine you knew it would devastate the region with ripple effects to the whole country and beyond, what would you do differently?

Move your family? Sell your business? Invest in or start a company that did disaster clean up? Sell your home on the low ground and buy on the high ground? Leave the country?

According to ABC News, “The earthquake in Japan reminded people what they already knew — that disaster can hit an earthquake zone at any time, and a tsunami can spread for thousands of miles.” “Using that information, we can improve building codes. We can do land use planning,” Michael Blanpied of the U.S. Geological Survey in Virginia said. “So we can forecast in the long term where the earthquake hazard is likely to be.”

Here’s something that we know with certainty. There is a tsunami heading for the North American economy. It’s the Business Transition Crisis created by millions of baby boomer entrepreneurs. Most people are avoiding the issue at their peril.

In her book, Willful Blindness, Margaret Heffernan documents at great length that most people, when faced with uncomfortable or unpopular information, will close their eyes to it. And in many cases, they make decisions that have horrendous effects on their health, their families, their reputations, even to the point of dying rather than facing up to the reality that was staring them in the face.

You’re beginning to see the early warning signals. Companies closing every day. Banks, accounting firms, financial planners, and lawyers are all warning of the dangers. But here’s the problem. Right now, the tsunami is just a just a small wave, moving slowly but inexorably towards you. It’s lulled you into thinking you have lots of time. Your company is different. You’re special. It won’t hit you. It might happen to someone else, but not you. And once you realize that it’s building steam, that it will be 3 meters high (and you’re only 2 meters high) it’s too late.

I’m not advocating that you should sell your business now, although some should. I’m not advocating that you should sell your business at all. But here’s what you can do to prepare for the wave that’s coming:

  1. Think about it. Open your eyes fully and look at it. Be objective and logical, not emotional. Get the facts.
  2. Evaluate your business against the reality. Take our free Reality Check assessment to see where you stand so you have some context.
  3. Your business should always be ready to sell because you never know what might happen that would cause you to want to change ownership. It takes a few years to get it ready if you haven’t already started.
  4. Prepare your management team to be capable of running the business without you. Take more time off, more vacations and coach them to make better and better decisions on their own.
  5. Join us for our seminar on June 23rd at the prestigious Langdon Hall in Cambridge – What Every Boomer Business Owner Should Know about Business Transtion (Before It’s Too Late) and get better informed so you can make better business decisions.

Right now, the water’s up your ankles. You still have time to move, but it’s getting higher.

Business Proctologist

I think I’m going to change my title to “Business Proctologist”. It’s a dirty job but someone has to do it and it could save a life.

There are some craniums that need to be removed from that dark place and that requires a special approach. People don’t want to be told they have their head up their ass. It’s a little embarrassing. It implies they are stupid and no one wants to think that. I’m talking about the millions of baby boomer business owners who should be planning for the transition of their business, but haven’t thought about it yet.

The good news is, they aren’t stupid. They are intelligent, ambitious, responsible and successful. The bad news is, they are afflicted. They have what is defined by Margaret Heffernan as “Willful Blindness”. In her book of the same name, she says that when the truth is uncomfortable or in opposition to what you want to believe – regardless of the facts – you simply won’t see it. She cites many examples of people who had the facts in front of them, but chose not to ‘see’ or act on the reality; Nazi Germany, sub-prime mortgages, Ponzi schemes, weapons of mass destruction, global warming, the link between tobacco and premature death, and the list goes on.

Eventually, the chickens come home to roost. Hiding from the facts or pretending they don’t exist only works for so long before reality happens.

If you own a business and you are 50, here are some facts. (If you’re over 50, it gets worse.)

  • You have a 15% chance of dying before age 65.
  • You have a 33% chance of having a serious disability before age 65.
  • You have only a 20% chance of selling your business.
  • You probably have most of your money tied up in your business – including what you plan to retire on.
  • You probably like working and don’t see yourself retiring, but there are many events that can change your mind.

Not planning for the smooth transition of your business is irresponsible. But you’re a responsible person. There’s the disconnect. You’re a smart, responsible person, but you don’t see the coming tsunami that is about to wash away your community, your business, your life as you know it. That’s willful blindness. That’s hiding your head…

That’s why you may need a Business Proctologist. I’m putting on my gloves now…

Give me a call. It might save a life.

Business Proctologist