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Mar 21, 201910:56 AMExit Stage Right

with Martha Sullivan

Managing the last stage of value maturity

(page 1 of 2)

It’s been a challenging winter. Well, challenging might not be the word that came to your mind, but we are in mixed company here.

I drive a lot in my work, so this winter has been particularly interesting. The cold, snow, and road conditions test a person’s safety, energy, and frankly, patience. One thing I’ve noticed is how few people have their lights on while driving. I’m not talking about night driving. Obviously, you should have your lights on then. I’m referring to having your lights on during your daytime travels.

Personally, my car lights are turned on pretty much all the time. Many cars, including mine, have daytime running lights, but I still turn my lights on. I do this so other cars can see me. It might be the only thing that catches their eye enough to look up from their phone in time. From behind, the only way other drivers are sure to see my car is if the lights are turned on — running lights don’t affect the taillights.

Do you remember the Sunday this winter that was extremely foggy? You could barely see the tips of your fingers. More people on the road didn’t have their lights on than did. These drivers hurt their own ability to see what was in front of them and other drivers, whether in front of them or behind them, couldn’t see them until right on top of them! Foggy, overcast, or dusk — neutral-colored cars are always harder to see. Add distracted driving to the mix and you have a very dangerous situation. The 130-car pile up on I-41 in mid-February comes to mind. I wonder how many people didn’t have their lights on in that tragedy? You could say that driving without lights on has become a new pet peeve, and may be my new crusade.

You’re probably wondering what turning your car lights on during the daytime has to do with business. It ties together when thinking about the fifth stage of value maturity. The Five Stages of Value Maturity approach, as discussed in the prior five posts and in my colleague Chris Snider’s book Walking to Destiny, is a best-practice framework for building your company into a strong, sustainable, and transferable business. Stage Five – Manage — is all about, well, managing. In this stage, you’re managing what you have, what you need, and what you need grow so you can deal with the planned and unplanned things in your life. Driving with your lights on is the same thing. You can see where you’re going, protect yourself with visibility, and make sure you have your best chances of getting to your destination safely.

Stage Five focuses on aspects outside of your business. These aspects benefit from the hard work that’s gone into the first four stages. Your business is running better. Your income and profits are stronger. Your value has grown. You’ve thought about whether there’s gas in the tank or it’s time to turn your focus toward doing something else. Manage integrates your business life with your personal life. Here, you are actively managing your wealth and making sure the other parts of your life are taken care of, such as your estate, risk management, health and well-being, and retirement matters.

Wealth, estate, risk, and retirement planning is often neglected as an “end-of-the-line” activity. It shouldn’t be. Wise business owners know to manage these aspects of life on a regular basis. After all, things change. A decade or two ago, you may have had small children. Debt service trumped saving, although your focus was on building up your wealth. Your estate plan was a simple will directing who would take on the responsibility for raising the children.

Fast forward to your mid-50s. By then the kiddos are out of the house, or soon will be. You’re starting to think about what comes next with retirement and other things you’d like to do. (Even though it’s still 10 or 15 years away, there’s that twinkle in your eyes!) From a wealth-management perspective, you may have accumulated wealth in your own right. You’ve been saving and squirreling resources to build your nest egg. Soon, however, earning and accumulating wealth will not be the priority — marshalling its use will be. Estate-planning needs are different. Your thoughts are about your legacy and how you want to be cared for in these other phases of your life.

(Continued)

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About This Blog

Spending half her career as an advisor to privately-held and family businesses and the other half in CFO/COO roles, Martha Sullivan is a partner and the succession planning practice leader in the business transition strategies group at Honkamp, Krueger & Co., P.C. She and her team have extensive experience assisting business owners achieve their personal, business, and transition goals. “Don’t think of the 'exit' from your business like it’s a four-letter word. Make it your next adventure!”

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