- KNOW THE VALUE OF YOUR BUSINESS – Start by changing the way you see your business in relation to everything else you own. Your personal wealth is typically diversified and liquid. Your business wealth is concentrated and illiquid. Managing your business wealth is different and its value can grow to more than 50% of everything you own. Know where you are today, know what your business is worth and what is at risk. This is the best place to begin.
- SET UP A BUDGET TO MANAGE YOUR BUSINESS WEALTH – Managing and protecting your business wealth will have a cost as it should. You pay people to manage your personal wealth. Managing your business wealth should be no different. A good place to start is setting an annual budget in the neighborhood equal to .5% to 1% of the value of your business (Chris Mercer – Unlocking Private Company Wealth – The 1% Solution).
- WHAT DO YOU WANT? – Your planning is all about your vision. Ultimately it should respond to what you want for you, your family and your key stakeholders when the expected and/or the unexpected happens. This rarely happens in a vacuum. Find someone you can talk to who can give you the right perspective.
- THE RIGHT ADVISORS FOR YOUR PLANNING TEAM – Make sure you have the right advisors for the right roles/ seats. You want a strong team. For most of your planning you will employ a legal advisor, tax advisor, wealth advisor and Insurance/Risk advisor. If you’ve outgrown an advisor be ready to make a change.
- SET THE EXPECTATIONS FOR YOUR PLANNING TEAM – Get all your advisors committed to your vision and what you want. This helps to get all of your key advisors moving in the same direction. Everyone must be a team player. Failure to get everyone moving and headed in the same direction is where most planning gets derailed.
- ACCOUNTABILITY FOR ALL TEAM MEMBERS – Accountability is a key component of the planning process. Select the quarterback/integrator for your advisory team. As the owner you can choose to be the quarterback/integrator for the planning however it will take you away from running the business. It takes time. Find a quarterback/integrator you can trust to coordinate the team and manage the details by holding the team accountable.
- UNDERSTAND THE FOUR PRIMARY PLANNING AREAS – They are Succession, Retirement, Estate & Key Stakeholder Planning. Understand what the planning areas do for you, why they are important and also what they do not do. Together they are the foundation for protecting the Wealth, Income and Legacy of your business. Together they will help protect your downside, save you taxes and ultimately unlock the wealth of your business.
- USE A PLANNING SYSTEM/PROCESS TO GET THE JOB DONE – Business Value Protection Planning™ is one system you can use. It is a three part planning system developed by Marshall | Viliesis, the parts are Evaluation – Guidance – Execution. Using a Planning System keeps people and tasks on track, saving time and expense. It is simply more efficient using a planning system.
- KNOW YOUR PLANNING OBJECTIVE – Planning should not be an endless process. When your planning is Current – Complete – Coordinated for all four planning areas you know the work is done. Start with the end in mind. It helps to know where you are going.
- SET UP A PLANNING REVIEW SCHEDULE – Keep your planning meaningful. Set up a schedule to revisit it on a regular basis to keep it on track and working for you.
Contributed by Doug Marshall