Your business is your most important asset, and you deserve advisors committed to delivering the right advice, the best solutions and the expertise to execute the planning to protect your business value.
The first step to protecting the value of your business is to understand what it is worth in relation to everything else you own (Left Pie Chart) and then what is at risk without good planning (Right Pie Chart). Knowing the value of your business helps you make better decisions. Start by getting a valuation of your business. Today’s technology allows for basic valuations to be completed with speed and accuracy at an affordable cost.
Once you know the value of your business you will need a team of advisors. No Business Value Protection Planning can be effective and completed without Financial Professionals, Attorneys and CPA’s working together for the benefit of you the business owner. Unfortunately, this job is not getting done for the majority of small and mid-sized businesses. This puts 60% to 80% of business value and income at risk.
70% of Small and Mid-Sized Businesses have an incomplete succession plan or none at all. How can this be?
Sole Proprietors can get by with a Single Advisor in most cases. Their business model simple and straightforward. Large Private and Public Companies have access to Full-Service Consulting Firms with the needed team members already in place. The majority of businesses fall in the middle and it is easy to understand why studies have revealed a majority of business owners are not sure about where to begin because there is not an existing team in place. You need a team of advisors. It important to identify those with the skills required and willing to work together rather than independently. Your existing trusted advisors should be able to help you get started.
So how will you know if you have the right team in place? There are three indicators to help you.
Clarity – Communication – Confidence
Clarity – When you have clarity about the value protection planning areas and the role each advisor plays then you are on the right track. The protection areas include Succession, Retirement, Estate and Key Stakeholder Planning. It is the responsibility of your advisors to bring clarity to you. If you are not clear, then they have not done their job.
Communication – Require your advisors to communicate effectively with you and with each other. It is their job to make this a priority and the only way the planning done will be coordinated and complete.
Confidence – When you look at the team assembled to do the work for you, and you have a sense of confidence then you are on the right track. Hoping it works out is not a strategy. Confidence comes when the team combines clarity and effective communication.
Benefits of Partnership Thinking
Your planning team working in partnership will hold each other accountable. This is a huge benefit to you. The planning solutions designed are vetted by your Attorney, CPA, Financial Advisor and others. In partnership they deliver complete solutions. Embrace the partnership approach to planning. Make it a requirement for your advisors to embrace working in partnership with each other. Advisors work best together when committed to a common goal or objective. Require them to focus on the objective of protecting the value of your business, your most important asset. It must be the central theme at all times. This saves you time, money and eliminates much of the frustration associated with planning.
If nothing else, remember the message from the pie charts to keep everyone focused on completing the protection planning process.
Contributed by Doug Marshall