Happy Groundhog Day!
Groundhog Day was first celebrated in the US on this day in 1887 at Gobbler’s Knob in Punxsutawney, Pennsylvania. This long-standing tradition, which features a rodent disguised as a meteorologist, originated from an ancient Christian tradition of Candlemas (the Christian festival of Lights) which marks the mid-point of winter, half-way between the shortest day and the spring equinox. On Candlemas the clergy would distribute candles, representing how long and cold the winter would be.
The Germans later modified the tradition by selecting a hedgehog as means of predicting weather and brought the tradition to America when they settled in Pennsylvania. Groundhogs, which are apparently plentiful in the Keystone state, replaced the traditional hedgehog. Every year Punxsutawney Phil, the most famous of groundhogs, emerges from his burrow in February, not to predict the weather, but to look for a mate (who knew?). Whether Phil sees his shadow (six more weeks of winter) or not (early spring), he will return to his burrow and not emerge again until March, when he comes out of hibernation for good.
“What good is the warmth of summer, without the cold of winter to give it sweetness.”
John Steinbeck, Travels with Charley: In Search of America
Having grown up in Colorado, I am a bit of a fan of winter, so I don’t mind the additional six weeks of winter. Admittedly, as I have grown older, I am disliking the colder temperatures, but I still prefer fresh white snow blanketing the cold, grey/brown ground underneath. But knowing that Groundhog Day marks the midpoint of winter is a much better perspective than, “ugh, six more weeks of winter!” Despite the relatively mild winter we have had here in Colorado, you may be suffering from the “winter blues.” If so, here are some things you can do to help your spirits.
When you think about it, Groundhog Day is a silly little holiday, and one that the movie of the same name pokes fun at. Groundhog Day celebrates its 25th anniversary this year and is worth the watch as there are also some important lessons to be learned both in life and business…
In the movie, Groundhog Day, Phil Conner (Bill Murray), the cynical weatherman lives the same day repeatedly until he finally figures out what is important in his life. This 1993 comedy, which pokes fun at the ridiculous tradition of having a rodent predict the weather, is full of life lessons, according to People Magazine. My favorites:
Everything we do (or don’t do) affects others,
Make the most of down time,
Giving up won’t solve the problem, and
Live like there’s no tomorrow
Bill Murray’s character in the movie, Groundhog Day has the benefit of repeating his day over and over, until he gets it right. Let’s face it, you only get once chance if there is no tomorrow. Which brings up some important questions when it comes to your business:
what would happen to your business if something happened to you?
how would this impact your family, your employees, and your customers?
do your family, employees and advisors know of your wishes in the event of your death or disability?
Okay, so I hit a sore subject with you. Perhaps this is something you never really thought about. Or, worse yet you have chosen to stick your head in the sand and ignore the possibility of no tomorrow. If so, don’t give up (this won’t solve the problem), make the most of your down time, realize that your inaction affects others and live like there is no tomorrow –
Create a personal contingency plan for you and your business
Purpose of a Personal Contingency Plan
The purpose of a contingency plan is to minimize the disruptions to your businesses in the event of your death or disability and provide a framework and direction to your family, employees and advisors. A business owner’s death or disability can have a significant impact on your business’ continuity, ability to maintain financing and key relationships with customers and vendors. Therefore, having a plan in place can be the difference between a business continuing or not.
Often a considerable part of the value of a business is based on the business owner and that the owner will be available during the transition of the business after the sale. If the owner dies unexpectedly or becomes disabled this can significantly discount the value of the business, cause employee turnover, result in lost customers and lost profits. I discussed the importance of creating a business that runs without you in my last newsletter. You can read that here.
Failing to understand or ignore the impact that your death or disability can have on your business will either result in the failure of the business or at the very least reduce the value of the company. Regardless of the size of your business you should have a contingency plan in place.
Components of a Personal Contingency Plan
Developing a contingency plan is not difficult but will take some time. So, break it down into smaller chunks so that it is not overwhelming. Most of the personal contingency plans I have helped business owners draft have been written in a letter type format that includes the following sections:
Introduction
Management
Compensation
What Happens to the Business
Advisors
Possible Buyers
Your Goals
Closing
Each section describes in detail what you envision or want to happen in the event you die or become disabled. Specifically, who will manage the business in your absence, how they will be compensated, what happens to the business, the advisors that should be contacted, potential buyers for the business if the business is to be sold, and your overall goals for the contingency plan.
While this can be a difficult and emotional exercise it helps to write the plan as if you were speaking directly to your family or closest advisors. It may take several drafts; don’t expect to get it right the first time.
Communicate and Review Your Plan Annually
Once you have a personal continuity plan written it is important to share the plan with your family and those that will be responsible for carrying out your wishes. This way any items that are unclear can be addressed and corrected, ensuring that your plan is carried out the way you intend.
And because things inevitably change from year to year, it is important to review your plan annually, updating it for any changes that may have occurred during the year.
Takeaway: Live Like There is No Tomorrow
It took Bill Murray living the same day over and over and over again. He goes through periods of dismay, despair and self-destruction, until he begins to learn from his experiences and finally he realizes the consequences his actions have on others. Despite his despair, he doesn’t give up and instead uses the time learn French and how to play the piano. In the end he lives like there is no tomorrow, indulging in whatever he wants to eat, until he gets it right.
Do yourself and your family the favor of writing your personal contingency plan – live like there is no tomorrow.
Document your wishes for what happens to your business in the event of your demise and feel confident in knowing you got it right the first time.
Need help writing your personal contingency plan?
Contact me today, for a free sample of a contingency plan.
Want to start working on your transition strategy? Ask me about my Transition RoadMap®. The Transition RoadMap® is specifically designed to help you begin thinking about your business as an outside investor would. Whether you are looking to sell your business or just want to enhance value, the Transition RoadMap® should be part of your overall business strategy.
Learn more about the Transition RoadMap® here.
Ready to get started? Email me or call me at 970-389-4802 for a FREE initial consultation.
Stay Tuned!
Next up, we discuss exit readiness. Have a great month!
Don't want to miss the next issue? Get my newsletter ETS Compass right in your in box. Sign up here.
ETS Compass is my personal newsletter that provides thought-provoking topics and helpful guidance to business owners looking to navigate change in their businesses. Whether it is value enhancement or transition planning, it is my goal to educate you.
My goal is to provide useful and purposeful information to you that may help you transition from your business.
Author: Sheryl Brake
Sheryl is the CEO and Founder of Encompass Transition Solutions, LLC and former partner of a top 25 national accounting firm. She has been working with business owners in a wide variety of capacities for more than 30 years. Sheryl lives in her home state of Colorado with her husband, Michael.