Misconception # 1- “I’m All Taken Care Of
- “I have it all done.”
- “My estate and exit strategy are in order.”
- “My attorney and CPA have me covered.”
These are beliefs are commonly expressed by many business owners. While there may be confidence and truth behind these statements, what the business owner doesn’t know can crush their long-term business goals and ability to continue building business value.
“I have it all done”
Surprising to most, succession planning is a process not a project. Due to ever changing 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.
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.
The following are 10 different perspectives which, as a whole, are referred to as the Succession Matrix®. In order for your business to reach its full potential, your planning should focus on the following:
All of the perspectives of the Succession Matrix are interrelated. A weakness in one area can undermine the strength of another. Therefore, when addressing one area of the matrix, be sure to consider the impact it will have on another.
- If assets in your estate plan are not distributed equitably it could put undue pressure on your business, impacting its ability to survive a transition.
- If you have not properly trained your successor at the time of your exit, they may not be prepared to truly lead the organization in your absence.
Having an exit strategy and your estate plan in order are great first steps to succession planning. However, in order to build value and ensure your business will be around for the long haul, you must incorporate the other 9 areas of the Succession Matrix® into your planning. Through constant review and refinement of these items – you will build business value!
What are the issues impacting the value of your business?
Contact us to schedule a Phase I diagnostic assessment of your business to find out.