FINANCIAL PLANNING
We start with your goal—the reason you’re investing. Then, we make various recommendations: risk level, amount to invest, and type of account.
A good starting point is addressing the basics:
- Understanding what the value of your business is to a third party is valuable information whether you plan to sell or not. Understanding what the value of your business is to your family & your lifestyle is critical information. Seems straightforward – but the lack of understanding on this issue is where we see the most mistakes made.
- The owner’s unique objectives will drive the capital allocation strategy. These objectives will range from serial entrepreneur looking to ‘build, scale, and sell’ to the entrepreneur seeking to build a multigenerational business. The planning scenarios will be similar in some ways and very different in others
- Regardless of timeframe, it will be valuable to articulate answers to the following questions:
- What is your desired departure or transition date out of the CEO role?
- What is the value that you require from the business net of taxes to be economically independent?
- Who are the individuals or entities to whom you would prefer to sell or transition the business to some day?
Anticipate Trouble – this is not a glass half-empty lens, but rather anticipating the trouble spots with your plan will help drive efficient execution.
Having a plan will help frame your financial decisions inside and outside the business – leading to more optionality and better outcomes.