Contingency Planning – If Disaster Strikes Are You Ready?

 

Learning to anticipate common family business issues can avert a future crisis

Usually we think of a founder’s health, or worse, death, when we think of contingency planning in a family business crisis. But reading the recent news there are other situations that can affect us almost as much.

FERGUSON, MISSOURI “IT’S A WAR ZONE OUT THERE”

How would your business continue to operate if there was civil unrest in your town. It doesn’t even need to be your location that is affected but a major market where your customers are.

DEMOULA’S MARKET BASKET FAMILY FEUD: COMPANY BOYCOTT

What happens when the conflict between two sides of a family escalates to the point of a work stoppage and customer boycott. In the Demoula’s case the employees and customers supported a boycott of the company when the board changed family management.

How Would Your Family Business Cope in a Crisis?

The above examples are extreme and not likely to happen in your family business. More likely your issues will involve the health of the founder, family conflict or a financial event.

The key is to identify, anticipate, and contingency plan for family business crises in advance.

Identify the vulnerabilities in your family business:

  • Conflict – Is there growing conflict that is not being resolved which could cause a splitting of the family and derail the business
  • Employees – Is the family visible around the company or do they isolate themselves in their offices or in a specific company location. If employees aren’t appreciated it could lead to a work action.
  • Financial – Estate planning – Can you afford to inherit the business if the founder passed away
  • Succession – Have you started any form of succession planning. Even a top-level leadership role plan can help avert confusion in a crisis.

These are all unpleasant things to discuss in a family setting and usually are avoided and never resolved. Left unresolved the consequences may be even more onerous. Sometimes it takes current issues outside of the family business to catch our attention to the potential issues in our own business situation.