The art of golf and owning a business are more similar than you might imagine. Prior to an important game of golf, the right preparation, course research, new clubs and a range finder help the pros see what lies ahead in order to drive home a winning game.
In business, owners should never take a swing without a plan — doing so could lead to coming in over budget or over par. To get the lay of the land, a vital tool for success is the buy-sell agreement. Similar to a will for a business, a buy-sell agreement helps alleviate questions and concerns should the core business be changed by an owner’s death or any unforeseen circumstance.
With a fit like a custom club or golf shoes, buy-sell agreements offer business owners the opportunity to create a plan that is tailored to their needs well before tragedy strikes. Just as golfers want to maintain control of the ball — and to sink the putt every time — business owners also must stay on track and understand what the next hole or obstacle looks like before approaching the tee box.
While a buy-sell agreement may not be needed in the present, when the need does come, it offers a smooth transition as well as clear direction to those taking control of the business. Of course, like golf clubs becoming run down, buy-sell agreements also can become outdated and irrelevant as businesses transform and grow. Business owners should review their buy-sell agreement every few years to ensure it remains relevant and evolves alongside changes within the business. Doing so will ensure it remains as vital as a ball marker during an important putt.
No golf game starts without the proper tools. Professional golfers have access to a variety of clubs to assist with a winning game, making sure they avoid the bunker when they already are above par. Similarly, business owners should have a team of professionals that can assist in a hole-in-one agreement. The ideal clubs when creating a buy-sell agreement include an attorney who knows one’s business plans, an accountant who knows the financial ins and outs of payouts, buyouts and other business changes, a valuation expert well-versed in the value of the current and future business, and lastly, a financial planner to ensure there are available funds for the buy-sell agreement to exist. Having all the key players in one room at a single time can help cut down on translating issues, time and provide expertise to ensure the entire plan is a winning one.
When creating a buy-sell agreement, it is important to know what the goals are behind the agreement. Business owners should explore the course map and envision their future growth and revenue — alongside bunkers that may ensnare the ball along the way. Planning ahead, staying in control and monitoring changes are critical on the path to a perfect score. In doing so, golf games and businesses alike will stay on top and below par.