Many business owners struggle to achieve balance between money and time, often creating an unhealthy relationship with the business that ends up with less than intended results on the personal front. This runs counter-intuitive to a personality motivated to generate results and add to the bottom-line.
The good news: there is a "recipe for reform". The bad news: it takes work, but the payoff is significant. Here is a plan that will reward you with personal and professional balance:
Step One: Call in Experts. To truly create a more beneficial relationship between enterprise and owner requires qualified outside expert advisors. Care should be exercised when choosing your counsel. A CPA or business attorney alone generally cannot be expected to have broad, integrated experience that would provide you as a client with the most innovative, complete approach to asset protection and wealth planning. Simply adding a collection of singularly disciplined experts can add excess layers and fees. The industry is slowly recognizing thishence the convergence of experts. Clients are advised to research their options.
Step Two: Plan the Financial Journey. Your advisory team needs to know your personal goals, values and fears so that they can build a bridge between business value and personal wealth. Ask them about their process and how it will be tailored to your unique circumstances.
Step Three: Identify Business vs. Personal Assets. Any business planning process should begin with a qualified, objective appraisal of the business owners current and long-term business and personal financial profile. This can only be provided by a qualified appraiser with financial planning expertise. Experienced appraisers can provide cost-effective guidance on how to provide a more financially rewarding scenario that places the burden of risk on the company, and rewards the owner/founder.
Step Four: Ramp into Action. Allow your expert to do their workasking persistent questions designed to elicit important information. Rewards are waiting: balanced ownership of your life that can be more aligned with your dreams and a business with significantly greater independent value.
Defining a Business of Performance
A business of significantly greater independent value has consistent characteristics:
- The business has a clear understanding of its market niche, value propositions, mission, and core values.
- Systems and processes are highly refined, as are the roles and responsibilities of executives and staff.
- Governance systems are appropriate and respected.
- Communication systems are established, which keeps family and other stakeholders, including employees, well informed.
- The owners monitor the balance sheet and know the fair market value of the business from year-to-year.
- Management monitors the pulse of their industry and has in place a process for staying in the know.
- A process for recruiting, rewarding and retaining top talent is an established management function.
- Owners are paid fairly and care has been taken to maximize tax and retirement benefits as well as other planning strategies allowed by law to most efficiently transfer wealth into the future.
- A succession plan for family members, employees and outsiders is in place and has provisions for the unexpected incompetence or death of owner.
Having a successful small business is not just about getting the volume of money . . . it's the quality of the money that matters. If the business fails at its most fundamental objectivewhich is to take care of the owner and his or her familythen what good is the business?
Take a moment and take the temperature of your business and relate it to the pressing question: is this getting me where I want to be?