Is the Financial Plan for your Family as well Developed as the Plan for your Business?

By Gregory Leiser, PBO Consulting CFO and John Wheeler, Akili Capital

The work of a fractional CFO focuses on building the enterprise value of a client’s business, up to the point where a business owner decides to sell their company, and supporting them through the many transaction stages.  Also of key importance is aligning the interests of your business with the financial goals for your family.  This is an area where PBO partners with experts, such as Akili Capital, a firm that provides counsel to business owners on real estate transactions and family succession planning.

Most successful business owners realize that one of the keys to success is establishing a clear culture that aligns people, process and principled decisions to build value. When this is done in a business, the owner can reasonably expect to receive a higher than average price for the sale of their business.  If the goal is to transfer the business to another family member, alignment between business culture and the succeeding party will yield a smoother transaction.

The statistics suggest that 76% of businesses owners plan to transition in 10 years or less, but nearly half (49%) have no plan designed to facilitate this significant event. It is also striking to see that only 30% of family-owned businesses successfully transfer to the second generation and less than 12% to the third.(Source: Exit Planning Institute.)

With those numbers as a backdrop, the level of planning that owners give to the wealth transfer both in terms of liquidity and to the next generation is almost non-existent even though the impact is monumental and often destructive to the family and healthy relationships.

The reality is that successful owners have the tools to plan effectively, but the unique setting of exit/succession planning often receives all the attention to determent of the post exit/succession plans. Building the enterprise value of your company creates wealth, but failing to define your exit strategy and post exit objectives can undermine the process and erode the value that should create alignment for multiple generations.

So, what can be done to insure both your business and personal plans are aligned and that you are covering the bases in your exit strategy?

Here are a few questions to answer before you begin planning an exit.

·        What are my core goals in succession/exit?
·        Am I concerned with the company legacy after I leave?
·        What are my personal financial needs?
·        Do I have any social/religious causes I want to support after transition?
·        Is my spouse/family prepared to handle the wealth responsibility?
·        What will I be doing one year after I leave the company?

While this list is not exhaustive, it should provide insight to your readiness and/or work to be done before negotiating an exit price for the business. Your strategic adviser should know the answers to these questions so that they can help you design a strategy that aligns your personal goals as well as supports the business plan.

About the Authors

Greg Leiser, Consulting CFO for Pro Back Office.

To learn more about how Greg can help you with your business plan contact him at or 858.382.8875.

John Wheeler, Akili Capital

To learn more about how John can help you with family and succession planning contact him at or 619.917.2887

Akili Capital partners with families, real estate investors, business owners and their Advisors to provide confidence in financial and philanthropic decisions, as well as peace of mind that their families will be well served over multiple generations. Philanthropic efforts and education are supported through Main Street Philanthropy.