Building Value In Your Business While Also Planning For The Unexpected
Multi-unit franchisee owners set out to establish a medium for putting their passion to work, a means to make money, and to establish a legacy for the future of their families. The end game is far from the mind of the entrepreneur when starting out. So is the thought of engaging in succession planning. After all, it conjures the image of a big pink elephant in the room that reminds us of mortality.
As the business continues to grow and success is gained along the way, owners get comfortable. At some point along the way you might consider getting involved in estate and tax planning at the urging of your CPA (if you have a good one!). However, what is rarely talked about are those ways in which you can build additional value in the business, while also planning for the unexpected. Simply meaning, planning for the future of potential unknowns, along with some of the knowns.
We've heard the all of the excuses for the lack of future planning. Some business owners say they have it all done, some believe they have their estate and exit strategy in order (perhaps so, but not documented), and others say that their attorney and CPA have them covered. All of this might be true, to some extent, but we like to think of future planning, or as we call it, succession planning, as an area that requires a specialist in the field, in addition to the already strong team of advisors surrounding you. Let's explore the most common themes we hear:
"I have it all done"
Surprising to most, succession planning is a process not a project. Due to everchanging goals, interests, finances, family dynamics, tax laws, and feelings, a plan that fits your business and family today may not work for you tomorrow. Although there's no one time event or finish line where you can have it all done, there are definite milestones that should be celebrated.
Succession planning should be thought of as a continual process. This thought may seem overwhelming at first; however, this process of constant review and refinement actually provides you the opportunity to uncover landmines as well as gold that you otherwise may not be aware of - impacting your ability to build business value.
"My estate and exit strategy are in order"
Many people directly relate estate and exit planning to business succession planning. "If I have these two things taken care of, my family, finances, and business are taken care of, right?" Sadly, this can't be further from the truth.
Succession planning involves much more than addressing your estate and exit plan. While both are important components, they actually represent a small percentage of issues that impact the current and future success of your business.
These common misconceptions are regularly expressed by many business owners. While there may be confidence and truth behind these statements, what you don't know can crush your long-term business goals and ability to continue building business value.
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