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Life Health > Life Insurance > Permanent Life Insurance

Demon Seed: The Adversary of Succession Planning

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What You Need to Know

  • What makes a business grow can make an owner hold on too long.
  • You need to help the owner plan for life beyond the business.
  • That might not be easy.

Control. It is the Demon Seed of the business owner.

It germinates quickly and its roots spread deeply in the mind and behavior of many entrepreneurs.

The size of the enterprise has little bearing on fertility. Over time the seedling grows aggressively and strong.

Any winds of market change, government regulations, competition, taxes, and the potential (adverse) impact on many individuals have little effect on the business “tree.”

Equally important, control is bipolar. It also provides the necessary incentive/motivation/confidence required to take risk.

To be creative.

To build something providing products or services that can improve lives, save money, streamline processes, and give the “builder” the real opportunity to design his/her future, income and time commitment.

Much has been written about small business being the driver of the U.S. economy. But what’s the expression? “Every miracle has its price.”

That same positive influence often becomes a powerful impediment to your efforts to help the owner make the financial arrangements needed to support orderly succession planning.

The owner is seduced by control. Drunk on its effect. Addicted.

Control does not release its grip willingly. Instead, it supports the perverted thinking that the owner knows all. Knows better than anyone else if and when a conversation around succession or exit planning should be entertained.

Isn’t it a primary objective of the entrepreneur to eventually monetize years of time and toil? Objectively, that’s obvious.

But the decision to act only comes when the owner believes it is time. Even then it is often done reluctantly.

But when? How much time is available? Health? Is every business owner immune? Qualification? Who has the expertise to be the architect of that succession/exit strategy?

There’s a lot of embedded emotion.

In many cases, that company is the identity of the owner. Life beyond the business is hard to imagine and difficult to embrace.

Control exercises supreme influence. Until it doesn’t.

And when that tree is ripped out of the earth by death, disability, divorce, disagreement, lack of (new) leadership… the failure to address this embedded risk is immediately thrust front and center.

Every specialist who has worked with business owners has a hundred horror stories which all share a common denominator.

The owner did not, would not, take the time to plan and protect what they had worked so hard to build.

Logic offers little competition to control.

Every business owner — in every line of work — rich or poor — young or old  — will exit their company. Horizontally or vertically, they’re going.

And the potential impact of a premature departure could be felt far beyond the individual.

Control will never surrender its dominance without a fight.

But is any of this taught in business schools across the United States? If you want to start a company, shouldn’t time be devoted to how you end it?

In a final twist of irony, when the owner finally realizes their company is controlling them, it’s generally too late.

Control… the last man standing.

Creator and reaper.


Michael J. MainardiMichael J. Mainardi is managing partner of Selling Technologies in Radnor, Pennsylvnia.


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