A big part of being a successful business owner is your ability to ask questions. This innate curiosity allows your business to thrive, adjust, and evolve. It’s also a good way to begin planning for a successful future outside the business.
Let’s look at the four questions successful business owners ask themselves when planning for a successful future.
1. Where Do I Start?
The foundational question business owners often ask themselves is “Where do I start?” It can be an overwhelming question. Fortunately, the answer is clear: Strong plans for a successful future commonly begin with determining what it takes to achieve financial independence.
Planning for a successful future, especially one outside your business, is a paradigm-shifting decision. However, it’s necessary to consider rather than ignore or think, “I have time.”
The stark fact is that all business owners eventually exit their business, whether by choice, death, or otherwise. The good news is that once you determine what it will take for you to achieve financial independence without your business, you can begin implementing strategies that allow it to run whether you’re at the helm or not.
This can have a cascading effect that strengthens your business while you’re still running it. It also helps you hedge against unexpected obstacles and downturns.
Best of all, determining what it takes to achieve financial independence isn’t a guessing game. A strong Advisor Team can help you quantify your needs and pursue strategies to support those needs.
2. When Should I Begin Planning?
Straightforwardly, as soon as possible.
A common misconception about planning for a successful future is that it’s linear. In many cases, businesses veer off their charted paths, in both good ways and bad. Having a plan that considers the unexpected can help you more nimbly adjust to the unexpected.
Another element to consider is that planning for a successful future can strengthen your business while you’re still at the helm.
For example, a crucial part of a successful plan is installing a next-level management team. This management team is what takes your business to the next level in terms of performance, profitability, and potential. It can also help you delegate responsibilities and focus only on the things you love about running your business.
Starting your planning as soon as you can is similar to accruing compound interest: The earlier you begin, the more potential you can harness.
3. Who Should I Sell To?
An underappreciated aspect of planning for a successful future is that this planning allows business owners to ask this question at all.
Without a plan for a successful future, an unexpected event could position owners and their families to have no choice or say in the matter.
For example, an untimely illness or death could force a business owner, or their family members, to liquidate the business to simply pay the bills.
Installing important elements of planning for a successful future, such as having a next-level management team and scalable business processes, can position you to choose the person, people, or entity you eventually sell to.
There are many considerations when selling your business. You’ll likely have financial goals that you want to complete. Just as important, you may have more aspirational goals, such as keeping your business in the family, having trusted managers run it after you leave it, or a desire to protect your employees.
Creating a plan early can help you identify what’s important to you. It can also help you avoid assumptions. For instance, you may want to keep the business in the family but discover that no one in your family has the skill or desire to take over.
4. How Much Do I Want?
After determining the amount and planning to achieve financial independence (i.e., the minimum amount you’d need to never have to work again), business owners can then ask a fulfilling question: How much do I want for my business?
The answer to this question depends on what your ideal retirement looks like. You may want to travel the world. You may want to finance higher education for your grandchildren. You may want to donate to charity.
To achieve these goals in ways that allow you to continue supporting your lifestyle, planning is essential.
While many business owners view this question through the lens of how much money they can get selling their business, the flip side of the coin is how to minimize taxes on a business sale.
Receiving maximum value for your business while still achieving your aspirational goals combined with minimizing taxes requires robust planning. It often requires the expertise of several different advisors from your Advisor Team.