Is Your Business Open or Closed for Success?
Nadir Chandra’s story was typical of most business owners who have made the tough decision to leave their companies. At age 54, he was confident in finding a meaningful second act and was ready to leave his 25-employee commercial sign-making business. Nadir was thinking of selling to one or two of his key employees and when I met him his first question was: “Is this the right choice for me and my business?”
Life After Your Business
Many financial advisors find themselves in the same predicament. You can envision your life beyond ownership, but you don’t have a clear picture of how to transition your business to the successor you choose, for the money you want and on your timeline. So, what do you and the Nadir Chandras of the world do?
“Often, they believe there are systems in place that will take care of everything when they decide they are ready.”
Here is what I told Nadir:
First, understand that leaving your company is a process. Realizing that life after leaving your business can be as fulfilling as your life as a successful entrepreneur is simply the first step. The next step is to figure out a way to approach your transition in a methodical, logical, and rational manner. Most financial advisors do not put enough thought and planning into their future succession plans. Often, they believe there are systems in place that will take care of everything when they decide they are ready. Maybe, they believe they’ll figure it out when they get there.
If that describes your situation, you are not alone. Most advisors for that matter, don’t know there is a succession planning and implementation process that is methodical, rational, and can be tailored to your unique goals.
Reaching your destination
Setting goals and objectives, while also understanding the value of your business, are the first steps towards planning your future. Based upon what you want and what you have, you can then examine and choose a proper path for you: be it a sale to a third party, a transfer to children, a sale to a co-owner, or retaining ownership of your business until the very end. As part of this process, you also must consider what would happen to the business and to your family in the event your death or disability precedes your “best outcome” plan.
Simply knowing the process and proceeding down the path to part with your business, however, is insufficient. If you can’t describe how you’re going to get there, is it likely you’ll reach your destination?
To promote success, here are some questions to ask yourself:
- What are my plans after I transfer the business?
- How much money do I need from my business to live comfortably?
- Who do I trust to continue running my business successfully?
- Do my children want any involvement in the business after I leave?
These may seem like straightforward questions that you may have thought of, but you may be surprised how often the answers to these questions may change. Communicate frequently with your family, partners, top management, and colleagues, to be sure everyone’s goals and expectations are in line. Your plan can change dramatically if your goals and objectives begin to shift.
If you’re unsure where to start or want to know your options, I have experience helping advisors and business owners identify and prioritize their objectives with respect to their business, their employees, and their family. If you are ready to talk about your goals for the future and get insights into how you might achieve those goals, I’d be happy to sit down and talk with you. Feel free to send me an email at your convenience.
- - -
Bill Black is an Exit Planner who helps financial advisors and business owners create and execute their business transition or exit planning strategy. In his spare time, he enjoys golfing, playing with his grandkids and exploring wine country.
Our Office
Aspect
Blog