OWNER FINANCIAL GAP
Originally posted: September 1, 2021
Updated: July 18, 2023
Family business owners are passionate about what they do. They’re working to carry on a business that family built – by their parents, grandparents, sometimes even great-grandparents and beyond. These owners are so busy providing for their employees, communities, and the next generation that they often ignore their own financial future.
Boiling it down to its true essence, business is a means to building wealth. And what are we supposed to do with that wealth? Ideally, it should fund our retirement, philanthropic desires, and future plans. In reality, unfortunately, many business owners work hard in their businesses without ever taking the time to:
All of the items above can be managed and developed by working with a wealth manager to determine what we call your “personal financial gap.” Here’s where the simple math comes into the picture:
This simple Financial GAP Calculation will uncover 3 possible realities:
Let’s break down this equation and where these numbers come from:
It’s simple math. Yet, it’s a calculation that many business owners simply do not take the appropriate time to do.
Don’t gamble with your legacy. Get a clear picture of your Financial Gap now, while you have the time and energy to change the equation.
If you’re still unsure about how to get started or have questions about Business Valuation, we’re here to help. Join us on July 27th for The Collective, a 1-hour family business coaching event and peer group. During this time, we’ll share a short lesson on Understanding and Simplifying How Business is Valued and then answer any questions you and your fellow business owners have.
BLOG | FAMILY DYNAMICS / GOVERNANCE
In 1978 the 2-circle illustration of family business evolved when Harvard business professor Renato Tagiuri and then-graduate student John Davis added a third circle – Ownership – to better account for the distinct groups that existed in a family business. With the addition of Ownership, the 3-circle model more accurately captured the seven facets of ownership.
Read MoreBLOG | LEADERSHIP
When I first started Compass Point 20 years ago, leadership was an ancillary topic. My work focused on the systems, financials, hiring the right people, and being a confidant to the owner. At the time I didn’t see it as leadership coaching, but rather as building a relationship with a client who trusted me enough to let me see the inner workings of their mind and business. I helped the person as I helped the business. Times – and leadership – have changed.
Read MoreBLOG | LEADERSHIP
Product. Team. Customers. Processes. Sales. Revenue. Profit. Cash. These are the elements to any good, viable business. But a family business needs more than just those elements to build a sustainable family business. With many dynamics at play, the business owner needs to understand which "hat" to wear, when to wear it, and when to switch. Do you know how to manage it all?
Read MoreAt Compass Point, we make it easy to get insights, training, tools, and articles straight to your inbox and help family business owners and their team continue to grow, learn, and lead.