Business owners are not suffering from a lack of advice. They receive advice from their attorney, CPA and other financial advisors, but they don’t listen to the majority of them. This lack of attentiveness is due to the fact that few advisors pose questions that compel business owners to understand the ramifications of their current decision or indecision.
Business owners exit their business due to death, disability or retirement. The first question becomes: Do they have an exit strategy? Sadly, the answer is “no” for the vast majority of business owners. According to The Wall Street Journal only 39% of business owners have a succession plan and 55% die without a will.
This leads to our second question: Why have most business owners failed to plan? They have accumulated substantial wealth and have built large profitable companies. They have reached this stage of life without taking care of the future of the business or those who depend upon it. They have made no provisions for the distribution of their wealth.
Have they not planned because they are unaware of the problem? Not a chance! They have talked to too many advisors, attended too many seminars, read too many articles and spoken to too many people to be ignorant of the seriousness of their succession planning.
These people have not planned because so many of their advisors over the years bypassed the client’s agenda to advance their own. They have so focused on planning techniques that they haven’t bothered to learn what motivates and worries the client, and where the client’s priorities are.
We must be able to get business owners to listen to our questions. By answering these questions we discover their priorities. Once the priorities are identified, we can build a plan with the client to address them.
Before we can develop thought-provoking questions, we need to understand basic information about business owners. Here are things that help shape their agenda.
o Business ownership provides one of the few guarantees of power, respect and influence in life. The business is the owner’s alter ego. Few men or women possess the power the business owner earns and eventually takes for granted.
If there were an organizational chart it would look like a spider web with the owner in the middle. Their decisions are based on gut instinct. They do not train people nor do they empower others.
o Retirement is death. Their withdrawal creates a dangerous vacuum. No one knows who to follow, what to do, how to do it or where it is.
o Most business owners heavily invest in their business instead of diversifying their wealth. For most of these people, the business comprises from 60% to 80% of their net worth. Worse, business owners concentrate all their wealth into a single portfolio: themselves.
In 36 years of working with these owners, I have come to the following conclusion: The biggest threats to their companies’ long-term survival are the business owners themselves.
If they are conscientious owners who work hard, know every customer and attend to every detail, they may make themselves the indispensable man or woman. And nothing functions when an indispensable part is missing.
In my opening paragraph, I mentioned that you have to be able to make the business owner interested in listening to you. The approach I use is to ask a question and/or tell a story that illustrates the natural consequences of not acting on a situation.
Storytelling in our business can make a personal and lasting connection with our service in a way no written plan or proposal could. People who will respond to nothing else are often motivated to action by a story.
Most of the questions I ask and the stories I tell are designed to ignite action. The stories are based on my own experiences, ones I collected from other people or from books and articles I read about individuals. If I do it right, prospects can see themselves in the same situation, facing the same problems, usually without a clue about how to fix those problems.
I want to engage business owners in a conversation that guides them to discover their own planning needs and to get them to participate in identifying those needs. In this guided self-discovery, I ask probing, open-ended questions that help prospects talk about their goals, dreams and failings.
Here are some questions that you can lead with or work into the conversation as it develops.
==”Will your business survive you?”
==”Are you the indispensable person in your company?”
==”How will your company function when it loses its indispensable employee?”