Wednesday, February 07, 2007

The Entrepreneur's Succession Plan

I have a friend who, in a few years, has built a profitable, growing business with over $10 million in yearly revenues.

He has several employees, but still does much of the work and all the strategy and planning himself.

I had coffee with him last month. I asked him, "What happens if you get hit by a bus tomorrow?"

He said, "I've made arrangements. I have lots of life insurance, to take care of my wife and kids if something happens to me. And, I've given my wife the phone number of a guy who will liquidate all our remaining inventory."

He paused. At that moment, we both realized the same thing: if he goes, the business goes with him. It ends as soon as the liquidator's truck pulls away from his loading dock with all that inventory. And he's worked too hard, and built too much, for it to end that way. It's time to start building his legacy. And that means, paradoxically, doing less.

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