This week let’s examine two more questions to discover the “alignment” between you, the owner, and your business. (See last week’s post for the first two questions). To answer these questions is the first step on the path to your freedom as an owner.
We at Jon Hokama and Associates, LLC (JH&A) have found that all business owners want their businesses to serve their life but often feel they are in a wrestling match with their business. Too often owners find they give away too much time (and money!) serving their businesses.
Let’s continue this candid conversation with your business. (If there is also a partner involved, these questions are equally valuable discussion starters to have with your partner).
Here are the other two key questions you need to ask your business to discover how well you’re aligned.
“Where do we want to be?”
Most businesses have a specific service area, geographic location and customer base tied to a location. When the business begins this location may work very well for owner and business but over time may become increasingly misaligned. Some factors driving these changes include
- The business is “landlocked” and has to change location to accommodate growth.
- The business may acquire a subsidiary or branch in another city or state and have to make decisions about where the headquarters is to be located.
On the other hand, the owner may find that the location is less than suitable because of a changing life situation. For example,
- Aging parents: the location of business may make it difficult for the owner to support those family members
- Adult children and grandchildren: when they are out of state or business requires the owner to have an excessively hands-on role (see “what” question above), the owner’s location requirements become misaligned with the business.
Unsurprisingly, we have seen a company divisional headquarter location determined by senior executive preferences and needs!
“When do we want to part ways? (Or invite in someone to take over?)”
The business may be structured in a way to ensure it “outlives” the life of the original owner. Consider the very rare successful multi-generation business.
On the other hand, most business owners have no clear exit plan in place. According to one of the industries we work with,
Only 25% have a succession plan in place to ensure their business transitions appropriately when they retire – the percentage with a formal plan increases slightly to 31% at age 60-64 and 41% at age 65+.
–FPA Research and Practice Institute study, 2014
It’s difficult for a founding owner to bring closure to a chapter of his business. He needs to dialogue with his business to find clarity about personal life vision and see how it aligns with that of his business.
The best time to have this dialogue with your business is 3-7 years before you intend to buy or sell your business. The next best time is TODAY. Coming to a specific date (and time) is the best way to keep both of you honest and intentional!
Toolkit:
Consider setting an appointment with your business: put a specific time and place in your calendar this week. To discover alignment with your business, write up the answers to these four questions from dialoguing with your business:
1.“Why are we still together?”
2.“What are each of us doing?”
3.“Where do we want to be?”
4.“When do we want to part ways (or invite in someone to take over)?”
