Working solely inside your business limits its growth potential. True success comes from dedicating time to building and planning for the long term.
Why Succession Planning Deserves Your Time
Closely held businesses are often lean, efficient and focused on delivering value for customers. As part of this well-oiled machine, many business owners find themselves making a continual tradeoff between working in the business and working on the business. It doesn’t have to be that way.
When asked, many entrepreneurs rank their business right underneath their family as the thing they value the most. So, dedicating time and resources to the long-term health of the business just makes sense.
We recommend that our clients start by learning what’s possible and then making a plan. The good news: you won’t be alone in this process!
Take Action: Plan with Your Leadership Team
Set aside planning sessions with your leadership team and trusted advisors. Discuss what objectives and outcomes would be gold-standard for you, your company, your family, and your community. Develop a plan of action and define benchmarks that will quantify both financial and non-financial objectives over time.
How to Balance Day-to-Day Operations with Long-Term Vision
It’s easy to get caught up in client requests, staffing issues, and financials. But if you’re only working in your business, you’ll never build the future you’re aiming for. Carving out time to step back and assess the bigger picture is a necessity for business owners looking to create sustainable growth and eventually transition the business.
Here are a few ways to make space for long-term thinking without letting daily operations slip:
Delegate and elevate. Assign recurring tasks to trusted team members so your calendar isn’t filled with work others can handle.
Schedule recurring “strategy time.” Block a few hours each week to focus solely on planning, innovation, or succession goals.
Encourage your leadership team to think beyond the numbers. KPIs matter, but so does asking: “Where do we want to be in 5 years?”
Tie short-term wins to long-term goals. Help your team connect their work today to the company’s broader mission and future.
Create space for ownership-level conversations. Even if a sale or transition feels years away, start talking about what it would take to get there now.
The ESOP Solution: A Flexible Succession Planning Tool
For many of our clients, ESOPs are the key to the business succession planning puzzle because of the timeline flexibility, owner-seller control of process and more predictable outcomes they provide. And while ESOPs work well with a wide variety of owner-seller liquidity situations, there are basic indicators that will help you understand if your company is a fit.
Is Your Business a Good Fit for an ESOP?
Use these questions as conversation starters to discover if your company might be a good fit for an ESOP.
Are one or more of your major shareholders ready to sell all or part of their company shares over the next five years?
Does your company consistently employ more than 20 employees?
Is your company consistently profitable and does it have optimistic prospects for the future?
Is maintaining the legacy and culture of the company you have built a priority for you and your leadership team?
Is your company a corporation (either S or C)?
Does your company currently have a strong management team?
Does your company have access to good financial information about its performance? Does it have CPA-prepared financial statements?
Take Action: Explore the ESOP Possibility
If you answer yes to many of these questions, the ESOP solution may be worth exploring.
Assemble Your ‘A’ Team for Ownership Transition
Your business is your life’s work. When it comes to transitioning your company ownership, what you do next and who joins you in that effort matter. We strongly believe the outcome will be positively affected by having the right people in your corner, with an unwavering focus on supporting your goals, interests, and passion.
The team of collaborators you put in place should include trusted advisors across the estate, wealth, and income tax planning spectrum.
In addition, always choose a “point person” who is entrusted with supporting you and your family throughout the process. Whether it is coordinating financial materials, correspondence, or helping to keep the selected process on track, this person is vital.
Take Action: Rally the Right Advisors
Take stock of your ‘A’ team and rally them in your effort. Missing any piece of this puzzle? We have a robust advisor network that can help connect you with the right people.
Final Thoughts
Balancing daily operations with long-term business planning is key to your company’s lasting success. Whether you’re just starting or actively exploring succession options like an ESOP, taking time to work on the business is a smart investment.
Our team of ESOP advisors is available to help illuminate how these insights might benefit your succession planning efforts. Contact us to learn how we can help.
