Thursday, May 26, 2016

Top Six Reasons Business Owners Should Meet With A Financial Planner

“I take you … to have and to hold, from this day forward, for better, for worse, for richer, for poorer, in sickness and in health, until death do us part.”

This marriage vow can be easily confused with the verbal commitment many entrepreneurs make to their business.  I know how important your business is to you. After all, I am married to a farmer.  Whether you are looking to become engaged to a new business or are exiting a present business relationship, you face a huge undertaking.  When I heard Alison Anderson share her story about her newly-formed business, I was intrigued by her intuitive need to help others buy or sell theirs. I can confidently say that if you know someone who is looking to do either, buy or sell, you will want to point them to SuccessionMatching, a “dating service” which matches buyers and sellers.  Alison has graciously allowed her story to be reprinted at my blog website.

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Six years ago I had a client at Community Futures who was looking for a way to sell his plumbing business without disrupting it in the process.  He knew it was going to be difficult to find a buyer while maintaining the strong working relationships he had with his suppliers, staff and customers. It occurred to me then that this was a problem many business owners were going to face in the near future. Eventually, it is a problem every business owner will face.

I decided then to take an economic development approach to succession planning and built to address this problem. We are an online platform that allows business owners to actively search for buyers while maintaining control over privacy. We also connect site members with economic development officers who can provide resources and advice on where to start their transition plans.

There are three types of succession plans: family transition, employee share ownership programs and third party sales. Over the past five years, I have facilitated many succession plans, gone on speaking tours, and worked directly with clients within all three types of succession plans. From these experiences I have documented trends and pain-points familiar to thousands of business owners who are going through the succession planning process. SuccessionMatching and Community Futures Saskatchewan have partnered to put together a free step by step road map for business and farm transitions:

It is important to involve the right professionals throughout the succession planning process to help ensure the transition goes smoothly and maximize retirement funds from the sale. One of the key advisors that all business and farm owners need to meet with is their Financial Planner.

Here are six top reasons business owners should meet with a Financial Planner before selling their business:
1. Evaluation of their current financial situation.
2. Identification of retirement goals, places you want to travel and how much to put away (if any) for inheritances.
3. Calculating how much you will need in retirement.
4. Mapping out retirement goals. You have worked hard to build up your business, now is the time to do what you have always wanted to do.
5. Understanding your cash flow and expenses during retirement years.
6. Designing an investment strategy around your changing needs and bringing in necessary experts to accomplish these milestones.

Alison Anderson
CEO, SuccessionMatching

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Alison gladly welcomes feedback on her six points why business owners should talk to a financial planner before they look for a buyer. 


Thursday, May 12, 2016

One Step at a Time Towards Financial Literary

In case you haven’t noticed, “Financial Literacy” has become big news in the last few years. One of the greatest outcomes was the appointment of Jane Rooney as  Canada’s first Financial Literacy Leader  Her role is to bring organizations together to discuss the need for education on the subject of money as well as to create awareness around the importance of financial literacy to Canadians.   

Wikipedia defines “Financial Literacy” as the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it (turns it into more) and how that person donates it to help others. That’s a fairly broad explanation for good reason. Money means different things to different people. Being financially literate may not come easily for everyone.

I’d be the first to admit I am not an expert about anatomy.  I can tell you I have ten fingers and toes but please don’t ask me where my liver is or any hidden organs for that matter.  All I need to know is I am grateful I have organs even if I don’t know their exact location.  Because of my lack of knowledge in the field of health science, I empathize with people when they tell me they are clueless about their finances. 

Generally, we have a tendency to focus on the things we are good at or so-called experts.  Our attention is given to the matters that earn us “a living”.  Whether you are a truck driver, operating room nurse, or fire fighter, you are an expert in your occupation.  In some cases, being an expert in every aspect of money isn’t vital but having the basic knowledge is. You still need to have “some” knowledge about managing it and using it to make your life enjoyable. While you know food is essential to create a well-balanced and healthy body, you don’t have to be an expert to develop good eating habits. Much the same can be true about money.  You don’t have to be an expert to know the basic fundamentals about saving and spending.

Thomas A. Edison said, "Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time."  This deep-rooted message speaks to the person who makes every effort to save but feels they just can’t; to the one who feels he will be in debt forever; and to the couple who believe they can’t afford to retire.  The overwhelming feelings of defeat and fear make taking steps to learn more about money management difficult. The answer lies in learning more, asking for help when you don’t understand AND knowing it’s okay not to know everything. Additional education and resources for financial literary became a reality to help you become smarter about money.   The end result, when you put forth your best efforts, is that you will feel more in control of your money and your life.  

In order to move forward in our lives, I read that there are three questions we need to ask ourselves.  This exercise can apply to other aspects of your life, not just money management.

What do you need to start doing?

What do you need to stop doing?

What do you need to keep on doing? 

The answers do not have to be “over-the-top”.  You can focus on taking small steps toward making small changes.  Learning something is far better than simply giving up in defeat.  Take the time today to examine and mull over your present circumstances.  What are your answers to these questions?