Almost every difficult conversation in an established business has a delayed-by-five-years quality to it.
The shareholder agreement that should have been redrafted. The trust structure that has been outgrown. The buy-sell arrangement with the business partner that was written when the business was a quarter of its current size. The succession conversation that should have started with the oldest senior team member. The estate planning that nobody has wanted to sit down with. The conversation with the spouse about what happens to the business if something happens to the owner.
None of these are urgent. That is exactly the problem.
The pattern I have noticed is that these conversations get postponed not because they are difficult, although they are. They get postponed because they are not on a clock. There is no due date. The shareholder agreement does not expire. The trust deed does not warn you when it has been outgrown. The succession conversation has no calendar invitation attached to it. So they sit, year after year, on a quiet mental list that the owner intends to deal with at some point that never quite arrives.
What I have seen is that these conversations tend to surface together, and they usually surface because of an external event that forces them.
An offer to buy the business arrives unexpectedly. Suddenly the shareholder agreement needs to be looked at. Suddenly the trust structure matters. Suddenly the buy-sell agreement is real. The owner has thirty days to deal with what should have been dealt with five years ago, and the cost of doing it in thirty days, under pressure, is significantly higher than it would have been in the normal course of business.
A senior team member announces they are leaving. Suddenly the succession plan that did not exist matters. The training that should have been happening for two years has to happen in three months, badly. The replacement hire is rushed. The continuity is disrupted. What should have been an orderly transition becomes a scramble.
A health event happens. Not to the owner, necessarily. To a business partner, a spouse, a parent. Suddenly the estate planning matters. The conversations that nobody wanted to have are happening anyway, in much harder circumstances than they would have been in any other context.
The bank wants to refinance and the terms have changed. The structure of the business that worked for the old terms does not work for the new ones. Restructuring under pressure costs more, takes longer, and produces worse outcomes than restructuring before the pressure arrives.
In each case, the conversation that should have been five years ago is now happening in three weeks, under conditions that make it harder and more expensive.
What I have come to believe is that the discipline of doing this kind of work when it is not urgent is one of the most under-valued forms of business judgment. Owners who handle these conversations in advance, slowly, when they have time to think and consult and structure properly, end up with significantly better outcomes when the external event eventually arrives. Owners who postpone end up paying for the postponement, often without realising the postponement was the actual cost.
The work itself is not the hard part. The hard part is doing it without a deadline forcing the issue. Setting up the time to look at the shareholder agreement when nothing is wrong with it. Reviewing the trust structure when no transaction is on the horizon. Starting the succession conversation when the senior team member has no plans to leave.
These things do not feel important until they are. By then, the window for doing them well has narrowed considerably.
If there is a conversation you have been meaning to have for more than a year, and the only reason it has not happened is that nothing has forced it, that is the conversation worth bringing forward.
It is always cheaper to have it before you have to.
Murray.
