A guest blog by Paul White, Ph.D., a psychologist, speaker, author and consultant.
As a psychologist who assists business leaders and their families in developing wealth transfer and business succession plans, it has become evident that the primary challenges are clearly nonfinancial in nature. Sure, there can be some financial hurdles to overcome, but due to the expertise of the wealth transfer professional community, the fiscal issues almost always can be addressed. What is left to be resolved are the myriad of relational, family dynamics and personal meaning issues.
Three challenges stand out that cause business owners to delay putting together even a minimal plan:
1. You are busy
Until you become disabled or die, you will almost certainly always be busy (and planning needs to occur before this happens.) As Stephen Covey brilliantly communicated in his quadrant of activities, planning falls into the “important but not urgent” quadrant. The process needs to occur. But, planning usually is not urgent, so it keeps being put off until some life event thrusts it into the realm of urgency.
2. It takes mental and emotional energy over a period of time
Facts need to be gathered. You need to sit down and become clear about your goals for the business, for your spouse, for your employees and for your family. This doesn’t happen in 10-minute snippets or even a three-hour session. So, for the planning to get done, it takes a commitment of time, energy and actions over time.
3. It involves other people
I’m not talking about your broker-dealer or insurance carrier. What you decide about the future of your business will affect your employees, along with your spouse and your family (whether or not they are actively involved in your professional practice.) As a result, it is critical to involve them and get their input.
Uncertainties cause fear
Business succession planning is difficult because there are uncertainties. You don’t know how long your health will be good or whether your adult child will be able to manage the business. Most astute business leaders learn how to assess and manage the risk associated with the unknown. But when it is your business and your family involved, the decisions to be made take on far more personal relevance. As a result, they often get delayed.
Finally, business succession planning is sometimes avoided because you have no idea what you would do if you didn’t work. For many of us, our work becomes our identity. We love it. But we have no clue what life after work looks like. So we don’t want to think about not working. The problem is — this really puts your business, your family and your employees at risk should something unfortunate happen to you.
The worst thing you can do regarding your business succession plan is to think about it but not take any action. Why? Because by thinking about it, you can deceive yourself into believing you’ve actually done something. Following are potential action steps I would encourage you to take:
1. Talk with your spouse, major employees, and involved family members. Start by telling them you understand you need to do some business succession planning.
2. Identify an expert to coach you through the process, which includes
● Thinking through the issues that need to be considered
● Helping you design a process that includes all relevant individuals
● Keeping you on task over time
● Assisting you, your staff and your advisors get the needed tasks completed.
3. Begin to talk to the others involved. Start by finding out what they want (it may not be what you want), and hear their perspectives. They may not be honest if they hear what you want first and their thoughts differ from yours.
4. Use your coach to help you work the plan, step by step. Get some aspect completed. Don’t get bogged down by the apparent complexities. Take it a piece at a time.
You have completed several large, complicated projects over your career. Otherwise, you wouldn’t be as successful as you are. Don’t let your future, your family, and your employees suffer as a result of not taking care of your succession planning.
Learn more from Paul White in his SoundviewPro course Leading Successfully Through Challenges and Obstacles.