Last year, I was consulting with a client who owned a business that was worth over $20.0 million. He said that one of his advisers told him “Why waste your time and money developing an exit and succession plan? You will be dead and won’t care and let others take care of it after you die.”
I guess that’s a good plan – if you don’t mind the chaos it creates for your family members and if your legacy is not important to you.
The first question you should ask when you start working on our succession plan is what do you want your legacy to be?
Legacy is one of those words that is hard to define. It has different meanings to different people. When I use the word legacy it means how you want to be remembered. That can be money, memories and your impact on lives of others.
What type of legacy do you want to leave behind? What is the most important thing for which you want to be remembered? These questions need to be answered before starting the succession planning process. Once you determine what you want your legacy to be, you are ready to discuss your business exit plan. Try to define your desired legacy as a statement. Here are some that I have seen:
- I want my son or daughter to continue what I have started and have them pass it down to the next generation.
- I don’t care how I am remembered or how my decisions impact on others. Just show me how I can get top dollar for my business.
- I want to sell the business for as much as possible to ensure that my family’s future is ensured.
- It is more important to me that my employees have jobs in the future; I will take less money on a sale to ensure that.
For some, writing a legacy statement is not very hard; they know immediately what they want their legacy to be. For others, this process will take years of soul searching. Regardless of the length of the process, it is the outcome that matters. At the end of the process, it is vital is to keep your legacy statement front of mind so that you align your desires and your life purpose to your succession plan.
Business Succession Planning Help
Need help creating a business succession plan that aligns with your desired legacy? Contact Rea & Associates. Our Ohio business valuations team will help you chose a business exit plan that aligns with your values and goals. From selling your business to leaving it to a family member, we’ll help you to get your business in its best shape for your desired exit