I have been speaking with a lot of business owners and other advisors who work with business owners over the past several months. While there are those who are unaffected by this economy, most have been dramatically impacted and are just trying to survive. They hope that their survival will lead to an increased market share in the future when the economy improves.
This is a great time to
be focusing on your business and putting together a plan for the future. Let me outline what should be part of this
The first thing you need to do is what we call a “gap
analysis”. In a gap analysis we figure
out where you are today and compare it to where you want to be in the future. In effect it is a retirement projection that
takes into account the difference between what you have now, including the
value of your business, which forecasts whether you will have a shortfall from
where you would like to be in the future.
If so, then there is a gap that needs to be filled.
Filling the gap: This is where many business owners
are today - working on strategies including “value drivers” that will help grow
the business to fill the gap we have identified. Value drivers are things you do to help build
value, protect assets and minimize taxes.
I spend a lot of time in workshops and client meetings talking about
value drivers and their importance.
As business owners examine their business in more detail one
of the necessary conversations is continuity planning. This planning answers the “what-ifs”. What if I get hit by a bus or lose my
partner? What if I lose my key
employee? What if my building burns
down? It is critically important to
address continuity planning not only for the sake of the business and its
employees, but also for your family.
Finally, we need to start thinking about how you are going to get out of
this business? Is it going to be through
a sale or via transition to a family member or key employee?