Getting through tough times
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 plan.
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?