We recently held an event featuring Tom Deans, the New York Times best-selling author of Every Family’s Business. The event covered how family businesses can best prepare for sale or purchase of a business, and included the topic of succession planning. After the event we had an opportunity to sit down with Tom, and we asked him “Tom, what are the top three things you would recommend businesses pay attention to with respect to their overall well-being?”
Here are Tom’s items to consider foremost, when thinking about your business’ overall well-being:
- Begin with the End in Mind
- Tom recommends that businesses start with the idea of building an exit for themselves. They should do this as they should realize that a business – transcends your own efforts – and comes to have value of its own. At some point in the game, this business is therefore, possibly worth more for someone else to buy than it is for you to keep and continue operating.
- Probe the Market for the Value of Your Business
- Referred to in Tom’s presentation as “a series of conversations” with potential buyers over a period of years, he recommends that business owners speak to their competitors about sale or acquisition to get a read on what might be possible in the longer term. During this time also getting a third party evaluation of the worth of your company adds another coordinate to your research and thinking.
- Decide What You Will Do with the Proceeds from the Business
- Sometimes it seems counter-intuitive to be thinking about life after the business, but it is a thinking pattern that we need to entertain if we want to understand what “life after the business” could look like for the founder and for the family and business partners. Very often the future is not thought out and this period can, therefore, be quite uncomfortable. It is after all, the next logical step in the process.
Tom also provides great insight on the topic of wills in his second best-selling book, titled Willing Wisdom. This book centres on the opportunity that arises when families actually write wills and share the content of these wills in family meetings, so that the future of the family is transparent, and not a surprise that is added to the surprises the family experiences on the death of a loved one.