Beyond the business plan
There is one outcome few of us would want: the dissolution of your business; a fast death with an auction or sale of equipment only.
In the last issue, I wrote about the positive benefits of being a residential painting contractor. Few jobs offer the freedom, pride, and income that we can easily enjoy.
As I approach my 45th birthday, I'm surrounded by PDCA friends and contractors of all ages. It's exciting to see others starting businesses, growing businesses, and transitioning their businesses.
For PDCA members, the knowledge to start and grow our businesses is readily available. Often the key is evolving a business plan that creates a business entity that complements the lifestyle you desire, which is far different than a business plan that is orientated purely toward expansion and profit. PDCA has helped me to build such components into my business plan, like creating free time, achieving manageable goals, and sticking within the niche I've created.
For me, achieving a particular lifestyle with my family and taking control of my time are true goals within my business plan-- they are direct, intentional components. It was a great lesson for me to once talk to a 60-year-old residential painting contractor who had been run ragged his whole life by the business he created. Still working six and seven days a week, he had great regret over all the lost family time. Another great lesson was talking to another residential contractor who, although he did double my gross volume per year, made only half the income that I did.
Quality of life in these uncertain times should dictate to us how we craft our business plans, and what our true goals should be.
Rapid expansion and high profits are admirable goals in almost any business plan. Even more admirable is the ability to achieve these results and still stay in balance with family and quality of life. So starting, growing, and defining your business as it relates to your life are all parts of our common journey. Yet as you achieve these stages of growth and success, a new issue looms ahead: "Transition."
Suddenly, I've realized my business plan needs to be revamped. Slowly but surely I need to include goals and actions that will, at a certain time, allow for business transition. Part of the difficulty in planning for transition is that most of us are unsure of what that transition will look like. Will it be a cash sale, an employee buyout, or perhaps a takeover by a relative?
Although the final scenarios are endless, most of us would agree there is one outcome few of us would want: the dissolution of your business; a fast death with an auction or sale of equipment only. We've all worked too hard to build what we have to see this sad final scenario. Yet have we done anything to protect our business and allow it to continue?
Now, a whole new world has opened up to study. Estate planning, taxes, and insurance as related to businesses become topics of keen interest. Business continuation requires planning. The profitable sale of a business requires preparation. Ongoing sales and service requires systems.
Steps in all these directions are required, as well as working with professionals. Relationships with bankers, accountants, insurance agents, and estate planning or business attorneys are all critical.
The purpose of this column is to get you thinking years in advance about tweaking your annual business plan for future transition. Little steps now will get you where you want to go.
In closing, I would be remiss in not mentioning that for many painting contractors, this information is putting the cart in front of the horse. I'm referring to those of us who may be so busy building a business that they have failed to protect it, or their families, in the process.
If you have not sought out the protection and peace of mind of having a will, life insurance, disability insurance, and a general liability umbrella, get busy. These are basic and necessary tools to protect your business's most valuable asset: you!
The future holds no guarantees of any for us. Being prepared lets us face the future head on and with added confidence. Take the time to adapt your business plan so that protection, preservation, and transition can all be achieved.
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