Attention Business Owners: Plan for Your Biggest Asset

Dealing with the day-to-day responsibilities that keep your company afloat can be exhausting. Even if you’re having a blast doing it. Managing your people, margins, customers, competitors, marketing, business development, vendors, and fixed assets, is an incredibly challenging role that requires you to be ready at all hours of the day to face any obstacle that comes spiraling your way. Also, trying to balance faith, family, health, and a social life on top of your daily regimen is an amazing goal to accomplish or even come close to achieving. After measuring the investment return on your dollar and sweat equity, it’s likely that the equity in your business is your number one asset. When it comes to managing your wealth, creating a financial plan that does not involve the sustainability, growth, and future transfer or liquidation of your number one asset, will only result in chaos and stress for you and your loved ones later in life. Unfortunately, for most business owners, having a plan that involves their most important asset is not so common. In fact, according to a 2017 study released by Wilmington Trust, after surveying 200 business owners, 58% of the business owners acknowledged that they have no specific transition plan for their small business. What’s more alarming is that 47% of business owners over age 65, had no transition plan in place.


I believe that one of the reasons these statistics exist is because business owners are not getting enough access to relevant financial advice that applies to the issues they most commonly face. The financial needs of business owners are overstepped because their business is an asset that most wealth advisors cannot monetize. Instead of receiving advice made to enhance their biggest asset and their overall net worth, they get pushed aside or led down a biased path that is best for their financial advisor and not the business owner. Maybe you don't need to max out your Roth IRA this year. Maybe what you need is a second sandblaster to increase production or widen your margins. Executive compensation, tax-deferral strategies, and succession planning are just some of the several complex issues business owners are confronted with. Typically, to effectively provide solutions to these issues, financial professionals must commit to additional training, on-going education, and collaboration with specialists (your legal and tax advisors). If you are currently working with someone that doesn’t provide solutions to real issues that matter to you and your business, it’s time to take another look at your options. In my experience, a successful entrepreneur or business leader recognizes the value in being able to clearly define and delegate the company’s goals and objectives to a competent team that can provide a plan designed to achieve those goals. When you hire outside advisors to help guide you and your business, why should you settle for mediocre results? The results delivered to you from third party advisors, should be as exceptional as the results you expect when delegating tasks within your own organization.


At my firm, Final Ascent, once our clients see an exit on the horizon, my partners and I focus on the three most important aspects of an entrepreneur’s life. We plan for the business owner, the business, and the sale or the final deal structure. We provide meaningful exit planning revolving around the owner’s post-sale lifestyle and legacy goals. We do this so that our clients are prepared for a new way of life. For the business, we focus on the key drivers that maximize enterprise value in order to create a pool of qualified buyers bidding for an opportunity to own and grow a special organization. Finally, our M&A experts guide you across the finish line negotiating a deal that is intentional and evolved from your personal goals and values. The only way to battle seller’s remorse is to start working with the right team early, create a plan, and execute the plan with confidence. For most business owners, the most efficient way to increase your net worth, is to increase the valuation of your business. Working with a team that understands this concept and diagnoses issues for both your business and personal lifestyle goals beyond your business, is a true step towards holistic planning.