Even after he found out he had cancer in 2017, Ivo Puidak did not create a business succession plan. A former top chef and the founder of the Galena Canning Company, Puidak must not have realized how much trouble that would mean for his family.
You see, he was planning to sell before he died. His wife and son didn’t want to continue on with the business, and it was a thriving concern. The sale was all set to close on March 30, 2020.
Mr. Puidak died two weeks before the closing date. Then, the pandemic changed everything. The buyer’s financing fell through. The canning company’s sales plummeted. The deal was postponed indefinitely.
That left Mr. Puidak’s family with unsavory choices. They didn’t have much experience running the business, which was now failing. They didn’t want to run the business, but they had no choice. There was no one else to step in.
Like many entrepreneurs, Mr. Puidak knew how to create products people would want. He knew how to get those products to market. What he didn’t know was how important a business succession plan would be.
This story ended relatively well. Mr. Puidak’s son had a life in New York, but he was able to step up and take over his father’s business and bring it back to profitability.
There were a lot of problems, though. “You don’t know if the same people Dad used are the right group,” he explained to the New York Times. “You don’t know what the intracompany dynamics are. You need to shore up the foundation, plug all the holes, then you need to take two months to understand what is there before you keep it or sell it.”
Do you know what would happen if you couldn’t run your business anymore?
You and your family rely on your business for your living. You can’t afford for there to be chaos if you died or became incapacitated. In order to avoid that, you need a business succession plan.
A good business succession plan will identify and authorize successors to your current leadership so that someone has the authority to act if you or another key person is unable to. It starts by understanding the key roles in your business and their responsibilities. Then, you can lay out a plan for emergencies and for your retirement.
At best, your succession plan can help your business survive without you. Without one, your family may not be given a choice but to scramble to save the company.
Today is the day to set up an appointment with a business law attorney.
Leigh Law Group can help with strategic business succession plans and ownership transitions.