Much as if you don’t plan for your business to survive over time, if you don’t plan for your business to survive through life altering events such as death, disability and/or retirement, your golden egg is at risk of being severely cracked, if not completely shattered.

Essentially, planning for the succession of your business may be the most important planning you ever do. Think about it for a moment. What would happen if…

You became completely paralyzed today? What would happen to your business? Your family?
You died in a car crash on the way home? What would happen to your business? Your family?
A recent heart attack forced you to back away from your business?
Your lack of planning created a permanent wedge between your children at your death?
Your wife was forced to sale your business in a bad economy all alone?
You waited too long and lost the ability to save for any retirement?

So, why do we as business owners procrastinate planning the biggest event of our family could face? There is a very simple explanation. The process can be like visiting a foreign country and not knowing the language. It is no wonder why only 33 percent of business owners have actually created a succession plan.^1.

When I began working in the world of finance, I was a banker. When it came to a business, everything was about the business’ financial situation and loan covenants. Then I became an insurance agent. The thought in the industry was that everything could be solved with an insurance policy. I also got a good glimpse into an attorney’s life. Their point of view is that the solution lies in having the right legal documents. And guess where the accountant’s focus is? You are right, taxes, taxes, taxes. The point is “If you have a hammer, everything looks like a nail. And that is just that in the process of business succession planning with a single professional.

Additionally, we have learned that a successful business succession plan is a progression, which starts with understanding the interrelationships of a business owner’s business objectives and personal and family life objectives. If you don’t start here, you risk having too many loose ends. Too often we see individuals seek advice without giving the rest of the story of their business and family life and goals. This combined with the hammer analogy, unfortunately, just gets them a lot of good advice that usually comes at a pretty high price and really doesn’t fit their situation at all.

This could be why our business has developed into what it is today, what we call A Life Planning Firm. The firm that is able to pick out which hammer hammers what nail at what point in time. Our four-step business succession planning process interprets this foreign language for business owners so they are not planning by default. Our one objective is to take business owners and their families from the complexity and risk to the freedom to Live Life on Purpose—which just happens to be our tag line.

1. Laird Norton Tyee Family Business Survey Family to Family 2007 and Price Waterhouse Coopers, Trendsetter Barometer

Kennedy Financial is independent of VSR Financial Services, Inc. Securities & Advisory Services offered through VSR Financial Services, Inc., a Registered Investment Adviser & Member FINRA/SIPC. VSR does not provide tax or legal advice.