Business owners are some of the best planners. Ask them about their company, and they can tell you what their 10-year goals are and the strategies to get there. It makes sense because that business is what that owner knows inside and out.
But what we as business owners are notorious for is pushing off or neglecting planning for things where we are not the expert. I see it constantly with personal financial plans of business owners. In short, there often isn’t one. A business owner typically has a significantly more complex plan that must be built. But it’s easy to push off because of the concern that it will take the one thing none of us have enough of: time.
Within most financial plans, we have consistent categories. We need to know things such as investment strategies, tax strategies, retirement planning, protection and insurance strategies, and estate planning to name a few. As a business owner, most of our net worth is tied up in the company. This brings in an entirely new dynamic that is considerably more intricate.
So, ask yourself, what is your exit strategy? On our Anything But Typical podcast, guest Mac Lackey discussed how vital it is for all owners to have a potential succession plan in place. Even if you have no interest in selling your business, an exit strategy forces you to analyze the health and stability of the company. Quite often it exposes that you are a keystone in your business. Without you, things fall apart. An exit will also likely take 5 years' worth of data and track record, so you might as well have the plan in place now before you need or want it.
Next, ask yourself, what happens if you or my partners can’t work again? Do you really want the bank or your partner’s ex-spouse running the business with you if something happened? Setting up operational agreements, buy sell agreements, key person strategies, and more will ensure as smooth a transition as possible in the case of an emergency.
As a business owner, we are often spread too thin. We push off and ignore time consuming responsibilities that are not urgent. And there are many more pieces a business owner must consider and factor beyond what’s listed above. So, however you find a way to do it, it is time to make a plan!