Peak Performing Business Strategy 5: How to Plan for the Long Term
By Kyle Danner
As human beings, we are wired to take care of our needs right now — not in 5 or 10 years or longer. But we live in a world where you can buy pretty much anything you want in 1-click and have it delivered to your doorstep tomorrow (or even today). When you think about it, it’s pretty amazing that you can have it your way right away. Of course, that comes with some challenges as well.
When you’re conditioned to have it now, what can you do to make the switch and plan for the future? You know you have to, especially when it comes to money and the family business. The wealth the business creates pays for so many of the family’s needs now as well as later. You must have some idea of what those needs might be in the first place so your business decisions will support them in the future.
To help out you start thinking and planning for the long term, here are 9 questions to get the wheels turning. You’ll notice the questions are organized by Family, Business, and Ownership. These categories represent the 3 Circles of Family Business. If you’re not familiar with the 3-Circle Model, it’s a nifty diagram that’s a classic in family business literature. It shows how the family, the business, and ownership aspects of family business come together, overlap one another, and often create some tension between each other.
Begin by reading through the 9 questions below. Don’t worry about answering them in the first read through. There’ll be plenty of time for that in a few minutes. After you read each question, pick a time frame of 5, 10, 15 or 20 years, depending on what you’re planning for. If you’re not sure, start with 5 years. That will at least get you warmed up.
1. How old will each family member be?
2. What life events will happen for each family member?
- Graduate or professional school
- New home
- Forever home
- New family
- 2nd, 3rd, or more children
4. How old will your senior leadership be in 5 or 10 years?
5. When will your senior leadership turn 60 or 65?
7. How much ownership will you want in 5-10 years?
8. Who else in the family might be interested in a piece of the business?
9. Who among your senior leadership might be interested in ownership?
Talk Through the Questions with Those You Trust.
Even if you just glanced at the questions, you might feel put off with the number of decisions and the amount of money involved. That’s okay. It is a lot to think about and it is a lot of money.
So here’s some friendly advice: Don’t do this alone. Talk to your spouse. Talk to your family. Talk to your leadership team. And talk to your other advisors. The more people that know you’re planning for the long term, the more help and insight you’ll receive.
This is particularly important for the family category. Unless you’ve made an intentional effort to set expectations with dollar signs about how life events like weddings or education will be paid for, everyone’s making assumptions. That’s just a set up for disappointment and frustration later on.
Keep in mind that, when it comes to family, you and your partner or spouse must present a united front. That will keep the pushback to a minimum and give everyone ample opportunity to plan accordingly. If your partner doesn’t have a clear idea of what your expectations are, it can be impossible for you both to be on the same page.
Plan for the Future by Preparing in the Present.
The processes and strategies your family business practices now will determine its direction for the future. Many family businesses in the early stages of life (the founder generation) can survive without clear processes. But, as the business and the family grow, it’s going to become more and more difficult to keep everyone on track and working together.
So how can you get a handle on the family business today so you can set it up for success tomorrow? The answer is simple: plan out your processes and ensure they’re followed the way they are supposed to be. The Entrepreneurial Operating System® (EOS®) is a proven, easy way to get everyone on the same page and going in the same direction.
Of course, implementing a new system is much easier said than done. As a business owner, you’re likely overwhelmed with your responsibilities at the office. Your schedule is packed, your inbox is overflowing, and your voicemail is full.
You don’t have to do it all on your own. As an EOS Implementer™, I can help your business transition to EOS without putting an excess of extra work and stress on your plate. Schedule a 90-minute meeting today to learn more.