The Greatest Generation, a phrase commonly used to refer to individuals who grew up in the United States during the Great Depression and fought in World War II, certainly knew the value of planning. First out of necessity and then out of habit, this generation planned for everything from the next family vacation to their long-term financial security.
 
Fast forward to today’s business owners. Smart, sophisticated and forward thinkers for sure, but these hard-charging entrepreneurs often leave personal plans behind in favor of focusing on their businesses. A comprehensive personal financial plan should be created hand in hand with business strategy and succession considerations. In fact, a comprehensive personal financial plan can actually create an important foundation for business planning.
 
Why is personal financial planning groundwork a prerequisite? In general, knowing where you stand today, financially speaking, allows you to make educated decisions regarding your future and how to get there. It provides clarity. It helps you identify, prioritize, prepare for and reevaluate financial goals, and deal with unforeseen events. More specifically, the comprehensive nature of a financial plan considers all aspects of your finances together to create a platform on which decisions, such as those outlined below, can be put in place, monitored and managed: 

• Insurance. What do my survivors need? Should I consider long-term care coverage?

• Financial independence. How much do I need to accumulate so that I can live comfortably without income from my business? How much cash do I need to generate from a business transition?

• Investments. Am I taking too much or not enough risk?

• Gifting. Should I be making significant gifts to family members? If so, when?

• Estate planning. How should my estate be structured to best provide for my heirs and minimize taxes?

• Charitable planning. Can the charities I support be a party to estate planning or even beneficiaries to the business sale? 

A foundational personal plan may help you more clearly consider economic cycles and return-on-investment decisions to address key business issues such as: 

• Building strategy and sustainable process

• Exploiting strengths and shoring up weaknesses

• Embedding institutional value by creating depth in talent throughout the organization

• Driving value in the exit process

And when the time to transition your business arrives, the power of planning can lead to power in negotiating. You should have the best available information to make an informed decision and know when to accept an offer and when to walk away knowing the deal just wasn’t right for you.
 
Business owners in the Greatest Generation inherently knew that planning is a process and an aptitude that never stops; it’s not just a moment-in-time exercise. Learning from the past tells us that a diligent and disciplined comprehensive financial plan can help put you on firm footing as you navigate through the many cycles of life and business. 

Don Laubacher is Executive Vice President of Family Wealth at Sequoia Financial Group, LLC. Contact him at dlaubacher@sequoia-financial.com to discuss this topic further or visit www.sequoia-financial.com.  
 
Cohen & Company is not rendering legal, accounting or other professional advice. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts and circumstances.
 
The material contained herein is for informational purposes only and is not intended to provide specific advice or recommendations for any individual nor does it take into account the particular investment objectives, financial situation or needs of individual investors. Sequoia Financial Advisors, LLC does not provide tax or legal advice. These professionals should be consulted separately before implementing changes to your tax or legal matters. Though related entities, Sequoia Financial Group, LLC and its affiliates, and Cohen & Company, Ltd. are separate companies with common, but not identical ownership. Investment Advisory Services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor.