Advice for CEOs

Newport Board Group Southern California Managing Director Richard Munro recently appeared on Exit Coach Radio.com, a show hosted by Bill Black that targets baby boomer business owners who are interested in exiting their business in the next 3-10 years.

Mergers and sales of companies are accelerating at a significant pace, and it is not just at the mega-merger level. Small and mid-sized companies are being swallowed up by larger companies flush with cash and ready to take advantage of the growing economy.

In the first part of this article, I described the need for every business owner to create a contingency plan to deal with the possibility (however unlikely it seems) of his or her death or disability. If unplanned for, such an event could lead your company into a chaotic situation that it might not be able to survive.

Entrepreneurs who head emerging growth companies generally recognize the need for planning. They see that they need to anticipate (formally or at least informally) for all kinds of risks and contingencies. What if they lose a key customer or supplier? What if commodity prices or foreign exchange rates rise or fall? Typically an entrepreneur has at least an informal plan in place to deal with such events—or can be persuaded of the need for one. As a business owner, you need to have a good contingency plan.

You are brave enough to read on – good for you. I promise this won’t be morbid. Exit strategy is a subject that you (and your business, your spouse, your children and your investors) need to know about.