Do You Have A Legacy Statement?
A few years ago, I was consulting with a client who owned a business that was worth over $20 million. He said that one of his advisors told him “Why waste your time and money developing an exit and succession plan? You will be dead and won’t care. Let others take care of it after you die.”
I guess that’s a good plan – if you don’t mind the chaos it creates for your family members and if your legacy is not important to you.
The first question you should ask when you start working on our succession plan is what do you want your legacy to be?
Legacy is one of those words that is hard to define. It has different meanings to different people. When I use the word legacy, it means how you want to be remembered. That can be money, memories and your impact on lives of others.
Listen to episode 173, “Back To The Basics Of Business Valuations,” on unsuitable on Rea Radio, to hear Mary Beth Koester explain how a business valuation impacts your succession planning goals.
What type of legacy do you want to leave behind? What is the most important thing for which you want to be remembered? These questions need to be answered before starting the succession planning process. Once you determine what you want your legacy to be, you are ready to discuss your business exit plan. Try to define your desired legacy as a statement. Here are some that I have seen:
- I want my son or daughter to continue what I have started and have them pass it down to the next generation.
- I don’t care how I am remembered or how my decisions impact on others. Just show me how I can get top dollar for my business.
- I want to sell the business for as much as possible to ensure that my family’s future is secure.
- It is more important to me that my employees have jobs in the future; I will take less money on a sale to make that happen.
For some, writing a legacy statement is not very hard; they know immediately what they want their legacy to be. For others, this process will take years of soul searching. Regardless of the length of the process, it is the outcome that matters. At the end of the process, it is vital is to keep your legacy statement top of mind so that you align your desires and your life purpose to your succession plan.
Business Succession Planning Help
Need help creating a business succession plan that aligns with your desired legacy? Contact our valuation and transaction advisory services team for help when choosing a business exit plan that aligns with your values and goals. From selling your business to leaving it to a family member, our skilled team of valuation experts are trained to provide you with business consulting services that will help you to get your business into its best shape in time for you to exit.
By Paul Weisinger, CPA/ABV, CVA, CEPA (Cleveland office)