The beginning of a business venture is an exciting time for everyone involved. Partners meet to discuss the initial strategies. Discussions focus on products and services, operating procedures, marketing, cost-benefit analyses and other issues essential to getting a business off the ground.
However, one issue that many startups fail to consider is the end-game. With all the more immediate concerns, it is easy to postpone or ignore the strategies for breakups, liquidation and other long-ranging concerns that seem such a long way down the road. But being prepared is the best way to insure success.
Looking to the Future
In addition to the issues that are intuitive in the initial planning stage – issues like what products or services you will provide, general operating procedures and the like – it is also critical to consider some of these essential back-end strategy components, as well:
- Liquidation: Not every business succeeds. Planning ahead for the potentiality of liquidation saves significant time, money and other resources if it comes to pass. Although it is not as fun to discuss liquidation on the front end, it is smart business.
- Retirement or departure: It should be clearly delineated how the remaining authority and partnership structure will proceed with the loss of one of its members. Will you immediately seek another partner to fill the vacancy? How will the assets and liabilities be distributed if this happens? These and other related questions should not be postponed until the situation is imminent; they should be handled and agreed upon during the initial discussions surrounding your partnership agreement.
- Buyout: The idea of your business venture being bought out by a larger entity is an important question to address right from the start. Companies that don’t consider this possibility are often blind-sided by internal disagreement on the fundamental vision in this regard. It makes sense to make sure everyone is on the same page on this issue before hanging up your shingle or entering into the online marketplace.
Although these issues seem a long way off, perhaps, they are all part of creating a sound business strategy. Another critical component is to talk with a business lawyer who has experience with startups to make sure you are considering all of the issues surrounding liability, real estate, zoning, employment policies, taxation and other important legal issues.
The best way to succeed is prepare for the future.