Most business owners have at least considered where they want to be in 10 years, but many of them have not established specific, actionable goals to get there. According to Inc.com, “More than 80 percent of the 300 small business owners surveyed in the recent 4th Annual Staples National Small Business Survey said that they don't keep track of their business goals, and 77 percent have yet to achieve their vision for their company.”
One of the best ways to start the planning process with your business owner clients is to dive into the discussion of setting their universal, financial, and values-based goals. As outlined below, the goal-setting process has a significant impact on business owners, their advisors, and the overall success of their exit strategy.
Benefits to the Business Owner:
You are essentially putting your clients blindfolded behind the wheel down the highway when you don’t create concrete goals. Devoting a proper amount of time to this first step will greatly enhance your chances of creating an effective planning strategy for your business owner clients. Only with these goals in place are owners able to take action towards a desired outcome.
Benefits to the Advisor:
Setting goals not only benefits the business owners, but also the advisors involved in the planning process. As an advisor, you play an essential role in helping business owners establish their goals by pulling out the why behind their decision to exit the business. Your role can range from a sounding board, strategist, and/or motivator. You will provide owners with a sense of security from going through the goal creation process and creating a path forward.
The Bigger Picture
Setting goals forces owners to think about the broader picture of their business exit. Why are they exiting their business? Where do they envision themselves in 10 years? Once an owner has an answer to the “why,” or “where,” they can then discover how they plan on getting to that point. Understanding the bigger picture gives owners and their team members purpose, direction, and reason to pursue those goals.
Helping an owner define their goals is also beneficial to you as it shifts the focus of the owner/advisor relationship, thus allowing for more types of planning work. Most business advisors represent the business in a transactional way, rather than the owner directly. For example, attorneys and CPAs draft documents for the business: employment agreements, leases, tax returns, financial statements, or cash flow projections. Exit Planning is an activity that sets you apart because the focus is on the owner, rather than the business, and that focus starts with identifying the owner’s goals and aspirations.
Creating a Clear Path
Once a client’s goals start to take form, you can help them develop the necessary steps to achieve their goals. This process will help create a road map for owners to get from where they are today, to where they want to be when they exit their business. Having a clear vision of the path ahead also reduces the initial anxiety many business owners typically associate with Exit Planning. By addressing the most pressing needs first and having contingencies in place for any unwarranted surprises along the way, business owners will have peace of mind that the steps are outlined for exactly what needs to happen to get to the next phase of planning.
Creating a path for your business owner clients helps to keep you and the rest of the advisor team organized as well. With timeline and action item checklists, each member of the team is aware of what needs to happen for the plan to be a success.
For goals to be clearly defined, you’ll want to include the owner’s entire team in the goal creation process – including their family. Opening the conversation to all parties involved allows business owners to identify and eliminate conflicting goals, dramatically improving the success of your exit strategy. Revisit these goals on a regular basis to see where there might be inconsistencies. Goals and visions for the future can change, so be sure to have these open conversations with all the parties involved as often as you can.
Exit Planning Advisors position themselves to be aligned with the actions of the other professional advisors involved. You are at the head of the table when it comes to this topic and you can bring in the resources you need to help your clients create their goals. No single professional has all the skills necessary to (a) execute the strategies necessary to achieve all of an owner’s goals, (b) prepare owners for life outside of their businesses, and (c) prepare businesses to run successfully without their owners. This leadership allows Exit Planning Advisors, like yourself, to build a unique trust with their business-owner clients.
Participating on an owner’s Exit Planning Advisor Team—whether as the Exit Planning Advisor or not—gives you direct knowledge about the direction and timing of a client’s business exit. This is crucial for building strong advisor–client relationships because it gives certain advisors opportunities to apply their expertise both in Exit Planning and their core practices, which inevitably leads to more business opportunities.