By: Patrick Ungashick
One of many famous quotes from Albert Einstein is, "If I were given one hour to save the planet, I would spend 59 minutes defining the problem and one minute resolving it." Einstein wisely recognized that solving a problem starts with properly identifying it. This insight has great value for business owners. If owners do not properly identify a problem or challenge in their business, they likely will not use the right tactics and solutions to get the desired job done.
We see this happen often in the area of exit planning for business owners that the problem is not accurately defined. Too frequently, owners (and their advisors) approach the owner's needs as a matter of "succession planning." Exit planning and succession planning are not the same thing. Succession planning focuses on meeting the needs of the business. Exit planning aims to meet the needs of the owner. A sound succession plan does not automatically produce a successful exit, and vice versa. Succession planning's measurement of success is the business's continuation; if the business survived the management succession, then the plan worked. While you may be deeply committed to your business's long-term survival, your personal and financial goals should not be ignored, but rather be of primary importance. Remember, an exit that achieves orderly management succession, but leaves you financially vulnerable or without peace of mind, is not a successful exit.
Watch this two minute video for further insights on how succession planning and exit planning are different, and how they apply to you as a business owner.
By accurately defining the problem, we can accurately resolve it. Is your current exit planning sufficient and on track? Are you missing anything? How do you know? The NAVIX Exit Plan Assessment is a tool to help you define the 15 most important areas that an exit plan needs to address. Use this tool to quickly audit your existing exit plan, or to assist you in getting started with your exit planning.