Transition.... Funeral or Wedding?
Updated: Jan 8, 2019
This past weekend was an exciting time for our family, as our oldest daughter got married. It was a beautiful day for a wedding! All the fine details came together with the preparation of hair and makeup, getting everyone to the church to get dressed, the ceremony, the pictures, the pre-reception, the dinner, and the reception. Even our other daughter’s maid of honor speech was a huge hit after all the stress and anxiety she had prior to presenting. It couldn’t have gone any better!
Weddings are significant life events that require months and months of planning, and in this case was a total of 20 months from engagement to wedding day. All this planning and preparation for one day that marked the start of their married lives together.
Did you ever wonder why this amount of thought and preparation goes into planning and executing a wedding, our cultures public form of recognizing a lifelong commitment, and why, according to a 2016 CNBC article, 64% of business owners over 50 have no formal succession plan? We, as a society, spend over a year or more planning for one wedding day, and most business owners don’t do any formal planning for the next 20-40 years of their lives.
When planning a wedding you need to meet with the photographer, the florist, the baker, the decorator, the DJ, the bridal shops, and the venue. Each of these play a critical part in making sure that everything that you want to happen is as you had expected, and that there are resources in place to address any hiccups that may happen, like the venue coordinator or a wedding planner.
So why is it the majority of business owners don’t even spend half the amount of time planning for their future and the future of their business?
A person who builds their business over the years generally doesn’t want to consider the fate of the operation after they retire or can no longer direct it. It can be an emotional decision that signifies a transition they may not be looking forward to, and it might involve the end of family management.
Moreover, the process of building a succession plan doesn’t usually translate into more sales, revenue or profit. Succession planning is like going to the dentist: You don’t look forward to it, but you need to do it periodically.
Maybe that is the answer! We need to make succession planning more of a celebration like that of a wedding and less like that of a funeral or dental visit. If we would spend more time planning for the next exciting life transition versus morning the loss of what was, there may be more business owners engaging in the planning process.
Just think about it, if planning for your personal and business transition was structured more as a celebration of the life that you have created and how you can now reap the rewards of that success into the next chapter, like a wedding celebrates the joining of two people, we would engage and look forward to the process. We could have mourned the loss of our daughter this past weekend and everything we have done as parents to get her to this point, but we chose to celebrate the beautiful young woman she has become and the man she has chosen to partner with for the rest of her life. Totally different perspective; but changes the excitement and enthusiasm about all the hard work of planning and decision making that went into making that day special.
So, think about your celebration of the life and business you’ve created and what that looks like as you transition to the next generation of owners, be it family or someone else. Is it a funeral or a wedding? A funeral is generally planned quite quickly because it is unplanned. A wedding, on the other hand, is planned over months, and sometimes years, in celebration of the future couple and their lives together.
To begin planning your wedding like transition, you will need a similar team of resources to come alongside you to make sure everything goes as planned. Some of the key people on your team should be a tax accountant, mergers and acquisitions attorney, estate planning attorney, financial advisor, and a business advisor to help quarterback the entire process, just like the wedding coordinator makes sure that everyone is delivering on the desired outcomes. You don’t want to choose just any quarterback, just ask the Green Bay Packers. You want an experienced quarterback that can provide you the objectivity and the execution to deliver. Transition planning requires a holistic approach and having someone on your team like a CEPA (Certified Exit Planning Advisor) can help you achieve your perfect wedding transition! So, what’s stopping you?
Jayne McQuillan, CPA, MBA, CEPA is a strategic management consultant, and the owner of Journey Consulting, LLC, in Green Bay