Back to Where I Started. What Will Her Tomorrow Look Like?
Decisions get stuck in predictable ruts and even more so the absence of decisions has far reaching impact on outcomes.
Having a few components pieces to Stepping Down doesn’t give you the best outcomes for yourself and your family because this is about quality of execution. An integrated, holistic approach orchestrated by project management will successfully factor in all components; the business, owner and family.
Think about this for a moment. Leave out any one of these components and this will shape unplanned outcomes.
· Do you know the health of your business in the current economic environment?
· Have you or your staff ever measured and tracked what drives revenues and growth of the business from the inside?
· Do you or your staff understand what risks in the business negatively impact these drivers?
· Does owner and family agree on what is the role of the business to family wealth?
If no one knows the answers to these it should be a symptom of hit the “PAUSE” button. You’re not ready. This is where partnering with the right people matters in getting the results you want…the “this is what I want this to look like” results.
To Reinforce This I Want to Share a Story
A business owner of a $250 million business wanted to step down from his day to day role as business revenues and profits were flat at best. He was tired of the struggle. He had no idea of what he wanted to do from here but he wanted his accustomed level of income. The immediate handicap was his adult children had no interest in the taking over the business. So their advisers suggest the fairest thing would be to sell the business and give the Children their share of the after tax cash. The lawyers suggested put the stock in a trust and name the children as beneficiaries.
Neither suggestion warmed the heart of the owner. Would it make you happy?
The tip off that all parties missed was that owner and family had different wants and that this was likely to stall out owner’s ability to step down. As a result, just park the stock in trust becomes likely.
What if a different game plan add more value because it could meet the wants of both owner AND family members? What if it could also give the children what they desire the most? What if the owner now owns the healthy thriving business he wants with a new team in place. What if in 3 years the business has out earned by 2X or 3X the revenues of the Children’s investment portfolio. This does not address the legacy and estate planning arrangements that occurred a few years later for which owner was a happy contributor, benefactor and participant.
Isn’t this a Win for the Client. Win for the Business and Win for family Capital?
