Do you need a Succession Plan ?
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We call it Success(ion) Planning...because your success shouldn't end when you retire.
Do you want to leave your future financial security to chance?
Every business owner KNOWS that they need to plan for their eventual, inevitable transfer of their business. Every owner is also extremely busy with the day-to-day operations of the company. Let the experts at Metro Business Advisors help you navigate the steps to achieve your Life Beyond Business of your dreams. No one’s course is the same as yours; together we create a highly personalized map to your desired destination.
What’s in it for me? Why should I plan for success(ion)?
- To minimize taxes
- To decrease risk of not meeting goals
- To reduce chance of losing options
- To avoid losing control of the outcome
- To protect the lower value if owner dies/disabled without succession plan
- To eliminate corporate hygiene issues that are decreasing company profitability
Following an interview process to determine client suitability, the Success(ion) Planning Process will:
- Identify your goals
- Determine how best to meet the goals
- Implement the plan
- Review annually to make necessary adjustments and ensure relevance
- To minimize taxes– The time to plan your succession is well before the actual planned implementation date. Minimizing the taxes paid upon transfer, many tax advantage strategies must be in place well in advance. How much of your life’s work do you want to give your partner, the US Government? This reason for succession planning hits you directly in the pocket!
- To decrease the risk of not meeting goals. – EVERY owner has a mini-series that plays in the back of their mind: What can I do when I no longer want or need to work? Your dreams don’t suddenly become reality when you leave your business. Decide what you want from life and set that as your destination and goal. Start taking steps toward that target now. Without conscious thought and real planning, you are unlikely to reach your goals (just like in your business).
- To reduce the chance of losing options.- Like tax minimization, the longer you wait to begin the succession planning process, the more expensive options you're wasting. Don’t sacrifice your ability to attain your goals, quality of life, and profit by procrastinating instead of planning.
- To avoid losing control of the outcome. – Show me a business owner and I’ll show you a person who likes to control outcomes. It’s just who we are! When preparing your succession plan – drive the bus, don’t be a passenger just waiting for the last stop. Advanced succession planning allows you to control what happens to your business and your future. You will gain peace of mind that the eventual transition is in the best interest of you, your family and your business.
- To protect the lower value if the owner dies,/becomes disabled without a plan. – Without a captain at the wheel, the business can only be on autopilot for a very brief time. With you gone, the business’ stakeholders (family, employees, bankers, creditors, customers) will need direction and communication. Confusion, infighting, and egos will decrease the value of the business while your heirs are most vulnerable. Don’t hand your business to your competitors on a silver platter at the expense of your loved ones.
- To eliminate corporate hygiene issues that are decreasing company profitability and value now. – The business management, policies, and procedures are necessary determinations of value. I call it the chaos meter: Are executives and employees bouncing from one critical issue to another with their hair on fire? Are there risks lurking on the margins? Are clients “delighted” with company performance? Does the business consistently deliver quality on time? What is your chaos meter telling you?
These six reasons should at least get you thinking about your future. Thinking is good; it’s the first step of every process…but thinking needs to be followed by taking action. Begin chipping away at the block.
Planning your inevitable transition out of your business is a large undertaking that cannot be accomplished alone. Having M&A advisors who have “been there, done that” is critical to your success. You need the advisors’ objective guidance to balance your emotional attachments. This is not the time to be trapped by feelings or others’ expectations surrounding your succession. Your success(ion) is about your future… your “Life Beyond Business.”
Metro's Flow Chart for helping Small Business Owners with Success(ion) Planning
Succession planning should focus on YOUR goals and vision.
Envision: What destination do you seek?
- You are the captain: Identify your goals & unconscious expectations as the business owner.
- Income – what do you need to live the lifestyle you want?
- When would you like to transition out of your business?
- Are you ready? Identify your emotional needs for you to succeed.
- Do you want ongoing involvement/investment in business – staged exit?
- Legacy – charitable, trusts for family, schools
- Values & personal objectives – re community, employees, etc.
- Bring in your crew: Identify the needs, goals, and expectations of the other owners, family, management, employees.
- Hold family meeting (if applicable) and individual management meetings to discuss everyone’s needs & goals with the understanding that no decisions can be made.
Plan: Chart your course
Planning for Success(ion) means looking at the ideal situation and then planning for contingencies.
- First Mates are Your Lifelines: Management planning – Who can best perform your tasks (responsibilities, skills, relationships) after you’ve left the daily operations of the business? How do you get those people ready?
- Objectively assess capability & willingness
- Hope for Smooth Sailing: Develop a best-case scenario –
- Prioritize & balancing needs & values of everyone involved.
- What is necessary to ensure smooth management transition?
- Consciously recognize your income, lifestyle & legacy goals in the succession plan.
- …But Plan for Choppy Seas: Explore all options
- Weigh goals vs. what is legally & financially feasible.
- Realistically analyze the finances and operations of the business with a market valuation of the company.
- Check the seas: Forecast future viability of the company through SWAT analysis of the industry.
- Strategize steps to improve company value to close any value gap that would prevent you from satisfying your objectives.
- Succession options include family succession, third-party sale, management buyouts, Buy-Sell agreements, ESOPs & others.
Achieve: Set Sail to your Life Beyond Business™
- Your Life Beyond Business is within your reach with the right succession planning.Chart your Course and Begin your Journey: Design & implement the succession plan.
- Create a map of what succession plan will achieve & how the business will look after the transition.
- Inform the other stakeholders.
- Draw up legal & financial documents with appropriate professionals.
- Correct your Course: Review and revise the succession plan annually to maintain relevancy and to address changing tax & estate laws, life changes (divorce, disability, the death of stakeholders), and business/industry changes.
Metro Business Advisors will guide you through the complicated process of defining your Life Beyond Business TM and creating more value in your company. Metro is here to help you Envision, Plan, and Achieve.