Developing wealth independent from the business is paramount to an effective business transition. Most business owners reinvest their profits back into the business in an effort to provide working capital and grow the business. These are worthwhile business practices (in some cases, absolute necessities) especially when the business is relatively new and is expanding. However, it is important that over time you also work towards developing a pot of wealth independent from the business. Having peace of mind that your financial security is not dependent upon the future success of the business will enable you to be more prepared for a transition.

Consider the following for accumulating wealth independent from the business:

  • Define what financial security means to you.
  • I have encountered individuals who have modest net worth and feel financially secure as well as individuals with significant net worth who grew up in the depression and are fearful they will be financially dependent upon their children.
  • What does financial security mean to you?
  • After you have defined financial security, develop a specific game plan to achieve your financial security goals.
  • Develop a relationship with a trusted investment adviser.
  • Develop an Investment Policy Statement to govern your portfolio’s asset allocation and performance.
  • Re-balance your portfolio quarterly or at a minimum once per year.


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