There are a handful of numbers and other metrics that will help you know if your business is headed in the right direction - toward sustainable, transferable profitability. The KPIs you need and the ones your competitors are probably ignoring are what drive profitability and business value - the two ways your business can, by design, reward you financially and allow you to make your desired impact in the world.
Enterprise Value Assessment (EVA)
If KPIs are the compass you use to know if you’re on the right track, then an Enterprise Value Assessment (EVA) lets you accurately draw the map you use to get to your destination. To really know what’s driving value creation and sustainably profitable growth for your business you need to add an EVA to your annual planning.
Right now, your annual plan demonstrates how you’ve decided to allocate resources to improve year-over-year performance with an emphasis on financial outcomes. The EVA will turn your annual plan into a value acceleration roadmap that ensures you won’t sacrifice long-term value for short-term, short-lived financial gains. An EVA will tell you whether you have a
- Profit Gap: Is your profit below that of your peers? Beating your previous profit goals is great but what if you are still less profitable compared to your best-in-class competitors? How much money are you leaving on the table and why?
- Value Gap: What tangible and intangible factors are impacting your ability to get a top valuation? If your best-in-class peers at the same level of sales are getting 2, 3, or 4 times higher multiplies than you would if you went to market, then what changes do you have to make to close that gap?
- Wealth Gap: Can your business help you reach your wealth goal, i.e. the amount of money you have decided you need to live a life you love regardless of whether you work? Chances are you’ve sunk lots of money back into your business over the years figuring that investment will eventually pay off and reward you for your sacrifices. Based on your current valuation and profitability will that day ever come?
The EVA will also give you new insight into your personal readiness for a future transition and inform a reasonable timeline for improving your business’ readiness based on its strengths and weaknesses and the prioritization of value driving activities.
For example, if you’re EVA reveals that your valuation is being dragged down by high owner dependence then the KPIs you monitor might now include
- Capacity utilization rates to measure how efficiently operations are running without bottlenecks that only you can resolve.
- Employee satisfaction surveys to monitor how intentional career pathing and successor development plans are impacting morale, productivity, and retention.
- Customer satisfaction feedback to determine how successful employees are at building strong relationships with customers without direct involvement from you in the marketing, sales, or fulfillment processes.
- Profitability per job, product, or project to demonstrate the team’s ability to drive profitability under non-owner leadership.
- Waste and rework metrics to demonstrate how well staff are trained to and comply with standard operating procedures.
- Successor readiness to assess how prepared the business is to maintain optimal operations in the event of a planned or unplanned change in leadership.
Annual planning with EVA
Adding an EVA to your annual planning process can be done without adding significant time for preparation and the results will add richness and depth to the conversations and analysis you’re already engaged in as part of your annual planning process.
The EVA starts with you completing two short, one-page assessments of business attractiveness and personal readiness. While you complete those surveys, we
- Do a financial recast using a trailing 12-month P&L report to determine your real vs. tax number
- Determine the Range of Multiples for your industry
- Use your Assessment data to plot your company on the Range of Multiples
- Use industry benchmarks to test your financial forecasting and determine whether you have a Profit and/or Value Gap
- Identify which factors are driving value and the areas where value acceleration strategies can yield the most benefit
- Work with you to determine if you have a Wealth Gap and how best to align your personal, business, and financial goals into a comprehensive Value Acceleration Plan
From there we typically engage your leadership team to present the EVA findings and Value Acceleration recommendations. Then we support the integration of this information into your annual growth plan - in strategies, tactics, and KPIs - that can integrate into your current business operating system (like EOS or Growth OS) or through our Value Acceleration accountability framework. The result is a plan that protects the value you’ve already created and focuses on high-value growth activities that get you the most out of your business on your personal timeline.
Ready to add an EVA to your 2026 planning process?
That thing you’re feeling—the stress, tension, and weight of running and growing your business—is friction. The more friction you face, the greater the effort required, making even routine decisions feel like uphill battles.
Every business owner I know, myself included, strives to reduce the effort needed to grow and be profitable. We implement systems, automate tasks, and lean on AI or standard operating procedures to smooth out operational bumps. But the hardest friction to remove—the kind that no app or process can outsource—is people friction.
People friction manifests in two distinct ways:
- The friction of loneliness and isolation
- The effort required to build authentic relationships and lead effectively
The friction of loneliness
The loneliness of leadership can feel like an invisible weight pressing down on every decision. You struggle to solve problems, evaluate opportunities, and take consistent action alone. You beat yourself up for knowing better but not doing better, questioning whether you lack the ability or the sheer will to succeed.
You try to ease the friction by reading books, watching videos, and replicating the success formulas of others. If they did it alone, surely you can, too. Or maybe you hire a coach who reinforces the belief that pushing harder and working faster is the solution—relying on willpower to force results.
But eventually, you realize that effort alone doesn’t work. You’ve exhausted yourself chasing formulas, methods, and hacks that haven’t delivered sustainable success. And because you’ve already sought help once (or several times) and it didn’t provide the relief you needed, you resist engaging the advisors who could walk beside you—not just offer advice, but truly expand your intellectual and emotional capacity to grow your business.
Sometimes, you avoid seeking deep, committed support from the outset, convinced you can't afford it, don’t deserve it, or won’t need it until you hit a major milestone. Maybe past advisors failed you, or you struggle to trust that someone could be fully invested in your success.
And so, you push harder—trying to create better results through sheer determination—only to generate more friction, because you’re still doing it alone.
The friction of leadership
Leadership friction stems from the gap between the effort required to listen, teach, coach, and elevate others—and the effort you’re willing (or able) to make.
You want employees to show up, do their jobs, leave distractions at the door, and be intrinsically motivated to grow. You want self-starters with adaptability, resourcefulness, emotional intelligence, and strong communication skills.
To ease the burden, you hire better, pay more, or delegate leadership responsibilities. Yet, despite these efforts, employees still need your time, guidance, and support. They need you.
You prioritize doing the work of the business, thinking that hiring managers and coaches will fill the gap—but without investing in a culture of leadership development, your efforts fall short. Employees become frustrated. You become overwhelmed and even resentful.
As your team’s needs grow, your ability to scale your business slows. Every attempt to bypass the work of building a high-performing, values-driven workplace creates more friction, not less.
"Friction tells us where things are straining, where care is needed, and where attention should go." - Kayla Scanlon
Your business’s nervous system is experiencing the friction. And you are experiencing the pain it creates.
If this pain has been lingering, it’s a sign that what you’re doing isn’t working. Not because you’re ineffective—but because the approach isn’t yielding the desired results.
Reducing friction starts with you
The friction and the pain it causes have your attention. So now, ask yourself:
- Where does my care need to go?
- What am I trying to handle alone that requires the right help?
- What needs to change in my approach to produce better outcomes?
- Where am I creating unnecessary friction that demands unsustainable effort?
When you pinpoint the friction within your business—when you act with care and intention to reduce effort and improve results—you create conditions that ease strain, remove barriers, and accelerate growth.
Reducing friction from loneliness & isolation
1. Build a Circle of Trusted Advisors : Many business owners believe they must "go it alone" to prove their competence. But having advisors and others who walk beside you—rather than just offering occasional advice—expands your capacity to make informed, strategic decisions.
- Engage industry peers through mastermind groups or networking circles.
- Work with committed advisors who challenge your thinking and provide sustained support.
- Build relationships outside of work—having other places and people who inspire you, where you feel like you make a meaningful contribution, allows you to bring a different perspective to your business.
2. Create a Decision-Making Framework: Loneliness amplifies decision fatigue. Without a clear framework, business owners second-guess themselves, delaying action or making reactive choices.
- Define "enough" for your business and life—what success looks like beyond endless growth.
- Set guiding principles that simplify complex decisions, helping you evaluate opportunities faster.
- Ensure accountability by sharing decisions with a trusted advisor, partner, or leadership team.
3. Cultivate Vulnerability & Self-Awareness: The pressure to appear competent can lead to self-imposed isolation. Admitting uncertainty isn’t a weakness—it’s a growth strategy.
- Recognize when you’re stuck and seek input rather than internalizing doubts.
- Speak openly about struggles—transparency fosters trust and collective problem-solving.
- Acknowledge mental and emotional fatigue—no business owner thrives without support.
Reducing friction by investing in leadership development
1. Shift From Transactional to Relational Leadership: Business owners often seek “self-starters” who require minimal guidance. But leadership development isn’t about hiring perfect employees—it’s about creating the conditions for growth.
- Develop leaders at every level—train managers to teach, coach, and lead with intention.
- Invest in structured mentorship—skill-building must be continuous, not reactive.
- Align leadership with company values—culture isn’t an afterthought; it’s a strategic advantage.
2. Replace “Hiring for Skills” With “Hiring for Potential”: Skills can be taught—attitude, adaptability, and values alignment must be prioritized. This shift in your approach to talent management from performance to performance + potential is crucial for successful succession planning.
- Recognize the potential in your existing team—invest in developing them instead of defaulting to external hires.
- Create pathways for leadership development—employees need to see opportunities for growth to stay engaged.
- Don't be afraid to replace yourself—reducing owner dependence frees your business to grow and increases your personal freedom while also increasing your business valuation.
3. Lead With Clarity & Consistency: Many employees disengage not because they lack motivation, but because the path forward isn’t clear.
- Celebrate progress—recognition reinforces commitment.
- Set explicit expectations—employees shouldn’t have to guess what success looks like.
- Provide regular, constructive feedback—growth requires guidance and guidance requires time and intentional attention.
Looking for more help to grow strategically?
Back in February, Dr. Donna Marino and I hosted a LinkedIn Live conversation about the how myths, personal beliefs, and emotions play a significant role in family succession planning.
That conversation became the inspiration for an article we co-authored for Family Business Magazine in which we talk about the need for frequent, candid conversations and the important role trusted advisors play in helping families navigate the complex and often complicated landscape where family relationships and business continuity collide.
My family business
My personal experience with family business succession planning is one of unspoken expectations, avoidance, and a distinct lack of planning. Despite having years during a long illness to talk with me and my siblings, as well as his own brothers, about the current state of the business and what might happen when he was gone, my dad stayed silent on the matter. It wasn't until he died that we found out he left the business to one of his brothers and that my uncle was only willing to accept the bequest if we (his nieces and nephews) used my dad's life insurance to pay off the debt.
What followed was months of conversations about "this is what your father would have wanted" and coming to terms with how my uncle's feelings of entitlement and being 'owed' something collided with the reality that my dad's business was not financially viable and the things my uncle had done to help my dad 'run' the business during his illness prolonged the inevitable need to cease operations.
In hindsight, one might say that my siblings and I could've started the conversations my father wanted to avoid. I even thought that myself - that I had failed to push the issue and force the conversation. Realistically though, as I approached my 40th birthday I was still my dad's child. I knew he would shut down and shut me out if I brought up things he didn't want to talk about or deal with. I knew I couldn't force him to do anything. And I didn't want to fight with him. He wanted to avoid the reality of his illness, his mortality, and a failing business, as well as the emotions and expectations of his children and siblings, so we didn't talk about it. Frankly, no matter how many times I rehearsed my opening line and talking points, when the time came I could never bring myself to address the situation directly.
That saddens me because it meant he dealt with a lot of financial worry by himself when he didn't need to, and he left a lot for us to deal with in his absence. It also saddens me because I know our family's experience is more of the rule than the exception. But it doesn't have to be that way.
"One of the things we often miss in succession planning is that it should be gradual and thoughtful with lots of sharing of information and knowledge and perspective, so it's almost a non-event when it happens." Anne M. Mulcahy, Family Enterprise Foundation
Collaborate and communicate
To be clear, I didn't know how to start these conversations with my family and we didn't have someone like me or Donna Marino to help us figure it out. When it's you and your family, old habits, communication patterns, and decades of relationship baggage make it hard to do this work alone. In fact, it may be an unreasonable expectation. I know first-hand that it's not enough to know what you should do. You need someone who has the experience and emotional distance to initiate and facilitate some of the hardest conversations you may ever have.
With that in mind, I suggest the following for those who want to become more intentional about their relationship to their family business, explore what a 'good' transition might look like, and engage an advisor to help you talk about tough topics and make important decisions.
If you're the business owner:
- Host family meetings to talk about the business and its future.
- Ask your children and other family members whether they want to be involved in the business and in what capacity.
- Ask yourself which family members you think are well-suited to be part of the business and in what capacity.
- Talk with family about how long and in what capacity you want to continue working in the business.
- Discuss what the business means to you and your family, and how you want to use the business to convey and preserve your values in the next generation.
- Meet with potential successors to acknowledge and discuss their readiness and willingness to work toward taking on new roles and responsibilities. Acknowledge knowledge and skill gaps and co-create plans to support their learning and preparation.
- Don't let old hurts, misunderstandings, disappointments, or assumptions go unaddressed - seek resolution to find common ground to move forward.
- Be candid about your fears and worries, as well as your hopes and aspirations.
- Act with and from love.
If your the family member:
- Share your interest in talking about the about the business and its future with the owner.
- Ask yourself whether you want to be involved in the business and in what capacity.
- Reflect on your readiness and willingness to work toward taking on new roles and responsibilities. Acknowledge knowledge and skill gaps and propose a plan for how you will prepare to take on more responsibility.
- Share what the business means to you and what you're committed to doing to preserve it's legacy and values for the next generation.
- Express your interest early and clearly.
- Don't let old hurts, misunderstandings, disappointments, or assumptions go unaddressed - seek resolution to find common ground to move forward.
- Be candid about your fears and worries, as well as your hopes and aspirations.
- Act with and from love.
For more information about how Purpose First Advisors can help you and your family plan for the future, visit our strategic business advisors page or schedule a free consultation.
Sometimes the people who can get you to really think about what's next - how long you want to keep working, what will happen if you suddenly can't work, how much you want to work, what selling could look like - are spouses, children, and employees.
Who in your life wants to know - deserves to know - what your succession plans are?
Even if you're scared, overwhelmed, or intimidated by the prospect of things changing, might the concerns and need for clarity from people you care about be the encouragement you need to prioritize finding someone to talk with about business exits, leadership transitions, and ways to preserve your legacy?
The questions my client's employees were asking her about the future combined with her growing desire to work less got her to make the call.
“I thought I’d work forever and forever is now,” is what she said when I asked her what had changed, and why she was reaching out to talk about selling her business.
She took a sip of her coffee and said, “I’m well past retirement age, my employees want to know what my timeline looks like, and I don’t want to work this hard anymore. At the same time, I’m trying to cut back on my hours but I keep going to the office. I’m freaked out about what I’ll do when I’m not working but also tired and ready to work less.”
“This all makes sense and almost every business owner I talk to can’t imagine not working. Frankly, I’m really glad your employees have been bugging you for a plan and you’re ready to talk.”
“Yeah, it's time. I’d like to start slow, maybe with an with an emergency succession plan and go from there.”
I smiled and said, “That’s a great place to start. That process will open up your thinking about how you run your business, what you might want to keep doing while you scale back your hours, and what legal documents and internal processes you need in place to ensure business continuity in the event you become incapacitated (or fly off for an extended Tahitian vacation.)"
“Oh, I’m the only one who writes proposals, does invoicing, does the banking - there's a lot of things that no one else does,” she said.
I exclaimed, “I know! That’s why your employees want to know what the plan is and I want to help you train them to do these things so a potential buyer will be confident that the business can run profitability without you.”
She smiled, lowered her head and raised her eyes, “I get it. I’ve just never had to train anyone on the things I do and so many little details and nuances live in my head.”
“Yeah, " I said “and it means that you’ve built a $3m business with one hand tied behind your back.”
"My job is to help you think about what will make your business most attractive to potential buyers and create as many of those conditions as possible. High owner dependence makes your business less valuable. So does a lack of standard operating procedures and cross-training.”
I went on to say, “For you to work less, others need to work more or we need to hire other people to take on different roles. You need to train them and let them practice doing new things. You need to teach them all the things you do instinctively that make this business successful.”
She leaned forward and said, “I do have one person I’ve been showing how to do some things and she might even be interested in buying the business.” she said. “It’s important to me to help her do that when we’re both ready.”
I smiled and said, “That’s so good to know. What a wonderful thing to work toward!
I made a note and explained, “that means it’s also important for you to start making financial decisions based on demonstrating consistent, reliable cash flow. If your employee eventually needs a bank loan to make this deal work the bank will want to see the numbers that tell them the business can service the debt.”
“Fortunately, we have time to document, train on, and delegate your responsibilities before we go to market. And we have time to get your financial documents in order in anticipation of due diligence and an underwriting process.”
With a sigh and a smile she said, "It's a good thing I’m not ready to be ‘done, done’ tomorrow. This sounds like a lot of work!”
“It is.” I put down my pen and said, “which is why it's always best to run your business to be exit ready and transferrable regardless of whether you are ready to or interested in selling. Now the most important thing is to get started and make these changes."
“Let’s get focused. I’m ready to do it,” she said, sitting up a little straighter in her chair.
Getting focused helped this owner increase revenue 34% and profit 137% YOY, update her estate plan, review her wealth management strategies, create an emergency succession plan, identify a prospective buyer, and set an asking price 40% higher than initially anticipated.
Even if you think you’re going to work forever, you might change your mind. Let’s talk about integrating succession planning and value acceleration strategies into your annual growth plan to position your business to be as appealing as possible to potential heirs or buyers. That gives you more business exit and transition choices whenever you decide to change your role in the business or sell.
Every generation - no, actually, every individual - has their own ideas about what work is, how much and for how long they want to work, and what retirement will look like for them.
Which is why some days I’ll talk to a current owner who is 60+, never plans to completely stop working, and needs income from the business to fund their retirement while the future owner is in their 30s and sees work as a means to living the life they want, not a calling.
Or an owner who is in hospice and still booking new business while their successor wants to retire.
Or an owner who isn’t ready to sell but is very eager to be out of direct client work and day-to-day operations while revenues can’t currently support new hires.
Or a prospective client who chose the hard work of being an owner to have the freedom to ‘do things how and when I want to do them,’ but sees profits (and the freedom they bring) declining.
The more in touch you are about what work is and what it means to you the more likely you are to
- Define success for you and your business on your terms
- Have a clear idea about if, when, and how you want to retire
- Understand how your plans impact the lives of others - family, employees, successors
- Openly communicate what your plans are
- Engage people dedicated to helping you make your plans a reality
- Take action to make changes that improve how your business works for you
You can start getting more comfortable with the ‘big’ questions related to work, retirement, your life’s purpose, and your legacy by asking yourself questions that shift your thinking from “who am I related to others?” to “who am I at my core?” Try one of these:
1. The "Who Am I?" Challenge
- List 10-15 words or phrases that describe you.
- Remove any descriptors that define you in relation to others.
- Keep words that stand alone.
- Analyze what remains.
- What do these words reveal about you?
- Do they align with how you see yourself when you’re alone?
- If few words remain, what does that say about how you define yourself?
- Reflect & refine.
- If your list feels empty, what traits would you like to define you outside of relationships?
- How can you strengthen those aspects of yourself?
2. The Subtraction Method
- Ask: If everything external was taken away—career, relationships, achievements—who would I be?
- For example: Imagine waking up with no memory of your past. What qualities would still be part of you?
3. The “What Would Stay?” Exercise
- List the top 5 ways you usually introduce yourself to new people.
- Imagine you had to introduce yourself without mentioning:
- Your business
- Family or relationships
- Where you live or grew
- What’s left? What parts of you are intrinsic rather than defined by things like your business?
4. The Mirror Test
- Stand in front of a mirror and describe yourself out loud—without using any labels or external roles.
- For example: Instead of “I’m a business owner," say “I love solving problems and helping things grow.”
- Keep refining until you get to deeper truths about your essence rather than your role or title.
5. The “Five Lives” Exercise
- If you could live five completely different lives, what would they be?
- For example: Writer, traveler, scientist, artist, healer.
- What themes appear across these lives?
- What do those themes tell you about who you are in addition to being a business owner?
6. The Inner Compass Test
- Imagine you move to a new place where no one knows you.
- You can’t tell people what you’ve done or achieved. You can only show them who you are through your actions.
- What actions would you take?
Contact me to learn more about how Purpose First Advisors can help you get the most out of your business and plan for ‘what’s next.’
VoyageSTL Article
At the end of 2024, Voyage STL asked me to share my story for readers (link above.)
In my responses, I look the liberty of going back to the beginning, which for me is being born into a family business. Dee’s Florist was my grandfather’s dream and my dad’s occupation.
My dad was one of those business owners who planned as far out as the next big sales cycle - think Valentine’s Day, Mother’s Day, and Christmas. He wasn’t an innovator. He didn’t change with the times. He ran the business the best he could for as long as he could.
When he died, there wasn’t much for the next generation because it wasn’t built for us. It was built to be an income source for my dad and our family. As such, in a less than orderly fashion, the business was dissolved more than a decade ago.
My family business experience was profoundly impactful in my life. It created some amazing memories and wonderful experiences. And it was the setting for some hardship, hurt feelings, and heartache.
There’s nothing wrong with wanting to run a business that creates the lifestyle you want and ceases operations when you are ready to be done working. In those circumstances you plan and execute an orderly dissolution.
What is problematic is running a business that
- never quite reaches your income, savings or profitability goals,
- doesn’t allow you to save enough to replace your income due to illness or disability,
- leaves heirs with debt to resolve,
- you are counting on to fund your retirement but can’t be sold, or
- isn’t profitable or sustainable for your heirs.
All business owners WILL EXIT their business eventually.
Even if you plan to leave the details to your executor, you owe it to them to have a well designed plan with all the legal and financial documents in order to take care of the business of your business when you’re gone.
So go ahead, work forever. But please do so
- In a way that allows you to generate the income, savings and personal freedom you deserve to live the life you love, and
- With an emergency succession plan (for the ‘what if’s’ of life) and a thorough, professional estate plan.
Learn more about how we can help you get the most out of your business and plan for the future to protect and grow what you have and the people you love.
Run Your Own Race
Trying to scare you into planning for your business exit is pointless.
And inspiring you to plan is almost as hard.
So why might you want to think about your end-game now?
Control.
Most business owners I know want to be in control - of their money, time, business, future.
How better to control future outcomes than to control how you build your business NOW so it will serve your needs LATER.
Freedom.
With each additional dollar in free cash flow and profit you generate, you increase the number of choices you can make - from new hires to a family vacation.
Choice = Freedom.
Winning.
No business owner has - ever - bragged about how they were forced to sell, got pennies on the dollar for their business, created a mess for their family, or declared bankruptcy.
Winning isn't bragging about how you increased revenue YOY or that you still put in 60-70 hour weeks after doing this for 20 years. It's exiting on your own terms.
Only 30% of the business that go to market will sell.
Successful exits are designed.
Our process includes:
- A valuation to right-size your expectations about how the market values your business.
- A business attractiveness assessment that helps you get a clear understanding of where your business value stands now compared to competitors - and what you can do today to increase income and long-term value.
- A personal readiness assessment that helps you understand your personal and financial goals so you can manage your expectations and prepare for what’s next on your own terms.
- An integrated plan that prioritizes activities that allow you to achieve your business, personal, and financial goals while building the value of your business.
Learn more about how a business growth strategy designed to increase income AND improve valuation is the bet way to grow.
Design your business to meet your goals
It’s a sunny Sunday morning on the last weekend in August and 5-6 people are queued up at the entrance to our local bookstore waiting for the doors to open.
Before the clerk can turn the key and fully open the door, an older woman made her way through the half-open door while very loudly proclaiming “It must be nice to have people waiting at your door to buy things from you.”
As she sweeps past the young woman who’s now holding the door open for other shoppers, her comment hangs in the air like an accusation, not a compliment.
“It Must Be Nice” always sounds accusatory, with a tinge of jealousy and dismissiveness mixed in. It implies that someone is enjoying an unearned or perhaps fair privilege compared to the rest of us and should feel contrite about it.
Perhaps someone has said something like this to you
- ‘It must be nice to take a real vacation.’
- ‘It must be nice not to worry about payroll.’
- ‘It must be nice to be your own boss.’
- ‘It must be nice to get to go to your kid's games all the time.’
How did it make you feel?
Not great right? But why?
Why are they trying to make you feel bad about what you worked so hard to achieve? And why do you feel the need to defend yourself or explain how hard it was to get where you are?!
The thing is, just because you are able to enjoy those things - less worry, a flexible schedule, financial freedom, peace of mind - doesn’t diminish anyone else's capacity to have the SAME THING. Anyone can build a business that fulfills their personal, business and financial goals.
Most people never do.
The best, perhaps only, response to ‘It Must Be Nice’ is, ‘Thanks, yes it is.’
If you’re looking at your peers and ‘It Must Be Nice’ is creeping into your thoughts, it might be because your business is running you, you’re not running it.
A business that fulfill your deepest desires requires a future-focus, intentional planning, and relentless execution. What’s NICE to have or be didn’t just happen for those owners - it was earned. Ideally, it was earned through a combination of clarity, intention, consistency, delegation, leadership and personal accountability and not through brute force or a belief that success requires sacrifice and suffering.
If you feel some resentment fueling your feeling that ‘It Must Be Nice,’ I suspect your 'keep your head down, nose to the grindstone, work harder, and make more sacrifices for an eventual payoff approach' isn’t working for you anymore.
Likewise, if you have been able to hit some of the ‘It Must Be Nice’ milestones but you did it at great personal cost - to your physical and mental health, finances, relationships - and feel like you just can’t summon the strength to do the next push,
You don’t have to.
What got you here doesn’t have to be and may not be able to get you where you are going.
Even if it can, you can choose another way.
That’s what we do at Purpose First Advisors - we help you build a business that will make you say things like “It’s SO Nice to”
- Not have to worry about payroll.
- Take a long weekend, vacation, and random day off when I want.
- Have a team I like and trust.
- Feel calm confidence more and less overwhelmed.
- See tangible improvements in growth and business value.
- Have a business that meets my personal, financial and business goals.
Learn more about how our growth coaching and consulting services can help you spend more time on white sandy beaches (or on ski slopes, whichever you prefer!) and less time in conference rooms.
Succession planning excites me!
Seriously, I love having things organized.
I also love a good contingency plan so that IF/when things go sideways the people who count on me aren't left floundering.
If you love feeling
- prepared
- confident
- organized
- ahead of the curve
Then succession planning will be a very satisfying experience!
For those new to the experience, I recommend starting with an emergency plan. This covers the 'what if' situations that you can't possibly foresee, are highly unlikely but could happen.
It's like an insurance plan - it creates peace of mind but without an annual premium!
Getting started
An emergency succession plan covers 3 scenarios:
1. Unplanned, extended absences
2. Planned, extended absences
3. Permanent disability or death
Starting with scenarios 1 and 2,
Think about
- WHO you want and who is capable of running your business on your behalf as an acting executive. Who shares and embodies your vision? Who knows the business of your business and can make sure everything is working to maintain a profitable operation until you return? Who will the rest of the team respect and follow?
You'll also want to talk to that person to make sure they are comfortable being designated for that role.
- WHAT needs to be done to keep things running. What things do you do? Does anyone else know how to do them? What might they need to do and do well for an extended period of time without your input or oversight?
- HOW things will keep moving while you're gone. Is process documentation complete and updated regularly (especially of things you do and are responsible for)? Has your acting executive been trained on your duties and have the opportunity to do them independently? Do they have the permission and access to all documents, systems and relationships needed to act on your behalf (passwords, bank signing privileges, payroll or accounting systems, key advisors and professional service providers, etc.)
For scenario number 3, you need to take the additional steps of making sure to
1. Include your business in your estate plans. It's a good idea to make sure your estate planning and legal counsel are on the same page regarding succession plans and the legal documentation needed for things to go the way you want them to when the time comes. They might talk to you about financial power of attorney for the business, creating a trust, reviewing your operating and buy sell agreements, etc.
2. Talk to your executor so they know your intentions for the business.
3. Leave instructions for the acting executive re: contacting and working with your estate.
So where's the exciting part?!
The Ultimate Win-Win
I hope that as you think about preparing for the scenarios that might unexpectedly take you away from your business you get excited about creating a near-term plan that takes things off your plate.
Training your team to operate without you can immediately improve your freedom, flexibility and level of ownership autonomy. There is no need to wait for a worst case scenario to put your plan into practice.
When your business can but doesn't have to run without you, you truly get to experience the benefits and privileges of ownership. And you can achieve this level of delegation and independence in a way that
- empowers your team,
- reduces risk and concern about business continuity (people like job security!),
- retains your levels of ownership and control, and
- increases the transferability and value your business.
Purpose First Advisors specializes in helping business owners create succession plans that de-risk your business while increasing value and personal freedom.
You probably think you only need to get a business valuation when you need to value the asset in a divorce or when preparing for a sale.
What if it became one of your annual measurements of the financial health, strategic direction, and overall performance of your business?
What if regularly monitoring your valuation metrics helped you dial in and amp up your growth strategies and tactics through an additional lens, one that looks at value and wealth creation in addition to income and profitability?
How might you approach your decision-making differently even if you never plan to sell?
Here’s my take on why adding an annual valuation to your growth planning can be a game changer for your business and your family:
1. Close Your Wealth Gap
Have you ever wondered if all your hard work will actually pay off some day? An annual valuation acts as a clear indicator of whether your efforts, investments and sacrifices are yielding long-term value. Your Wealth Gap is a key metric a valuation can help you benchmark and measure over time. Your Wealth Gap is calculated by subtracting your current net worth (not including the value of the business) from your wealth goal (usually a retirement or lifestyle goal). Usually the only way to close that gap is to build and extract (i.e., sell) that value from your business.
Not surprisingly, this metric ties into having a clear vision for ‘What’s Next’ for you and your business. Decisions like whether to retain ownership and/or to keep working in your business depend on what you want to do with the rest of your life. If you need more money to achieve your personal and financial goals, then it makes sense to plan to grow your business in ways that increase its value so you can make the most of this investment. By tracking your business’ valuation over time, you can measure how effectively your business is contributing to your personal net worth.
2. Close Your Profit Gap
In a valuation process, Purpose First Advisors will plot your business on a range of multiples for your specific industry. Using our Business Attractiveness and Owner Readiness assessments we’ll evaluate where your business ranks compared to best-in-class competitors. By benchmarking where your business falls on the range of values you can determine your Profit Gap - the amount of profit your business could be generating if it performed like its best-in-class peers.
When you hone in on where inefficiencies exist and improvements can be made your growth plan becomes more focused and effective. Your growth plan becomes a Value Acceleration process that increases value, wealth and profit.
3. Close Your Value Gap
Plotting your business on a range of values reveals both the Profit and the Value Gap. If your profit is below that of your best in class industry competitors, then your value is lower too. There is a gap between the current value of your business and how it could be valued once value is increased.
In addition to taking into account key financial metrics such as revenue, profitability, and cash flow, a Purpose First Advisor’s valuation will include intangible, but very real, drivers of value including the level of owner dependence, client concentration, process documentation, customer loyalty, and the strength of your team. Future prospective owners - internal and external buyers as well as family - will evaluate the health of the business using these criteria and an annual valuation is one of the best ways to assess your progress in identifying and preventing anything that can comprise the long-term health of your business. This clarity also transforms a growth plan into a Value Acceleration process designed to close all financial gaps.
4. Be Prepared for a Business Sale or Succession
You are an investor in your business. Knowing your current valuation helps you understand how your investment is performing compared to other investments in your portfolio. Why is this important?
- If you want to pass your business on to your children, you want them to inherit a valuable asset, one that not only provides income but has value on the open market.
- If you are thinking about having a key employee(s) purchase the business, a valuation helps them understand the value of the investment they would be making and start the conversation about financing and tax planning sooner rather than later.
- Sooner is also better if you think you might, one-day, want to sell to a third-party, you will want to know sooner.
- Opportunity may come knocking and you want to be ready to evaluate unsolicited offers.
5. Be Bankable
The saying goes, get credit before you need it. Your business valuation can be a key metric when securing a bank loan or financing. Lenders often look at the value of the business to assess creditworthiness. By tracking valuation as a KPI, you can maintain a good financial position to qualify for loans or lines of credit, especially when planning for growth or expansion.
Purpose First Advisors specializes in helping business owners Value Acceleration Plans that allow them plan and execute strategic growth. Start your FREE Business Valuation and 1-hour consultation here.