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The Personal Challenges for Successful Business Owners

Many times, the attributes and characteristics that drive business owners like yourself to great success may also cause them to take, or ignore unnecessary risks.

Let me share with you some of the statements I have so often heard from fellow business owners.

“My business is like my child”

Translation: I can't possibly see it objectively.
Much like we all think our child is the cutest, the smartest or the best athlete, so too do many business owners think their business is the one that stands head and shoulders above their competitor’s. They believe that the employees will never leave, and that the business will sell for full value the day they are ready to retire. Perhaps a triumph of hope over reality?

“I can get a better investment return on money in my business vs putting it into other investment vehicles”.

While this is possible and perhaps over many years may be true, there is a risk in having all of your assets in one place. There are many products out there that allow you to access money in a day or two. It is not always possible to get money back out of a business quickly.

“I have absolute belief in myself”

That is why you went into business for yourself! That's why you are successful! That is also why you can't always see yourself objectively and why many times you may not listen to the advice of others. It is always easier for someone who isn't you to see the situation or decision for what it really is.

“I'm willing to take chances and risks others aren't.”

Again, that is why you went into business for yourself and why you are a success. However, as wealth grows and your business becomes more mature, it may be time to think about preservation and what can go wrong.

No longer do you need that "home run" to win the game. You are 99% of the way there, so long as nothing happens. At a certain point in life, a good defense becomes more important than a good offense.

Many of our clients are successful as a result of playing offense. Typically, playing defense doesn't come naturally to them.

“My kids or employees will take over the business, pay me out, and I will ride off comfortably into the sunset”.

It is a lovely dream. However, do your kids share it? Do they really want the business? Will they run it the way you did? Work the same long hours? Are they really capable? Do you have key employees who are both capable and desirous of running the business? Are they young enough for that to make sense? Can they afford to pay what you think it is worth?

Rarely do we see well thought out, properly funded succession plans. They take years of planning, difficult conversations and lots of sacrifice. More often than not we find an owner with a successful business who is hoping it's all going to work out, with no alternative plan.

As Behavioral Finance Coaches, we absolutely owe it to our clients to tell them truthfully, where they stand in terms of risks.

We get it. We are successful business people too, and have the same drive and the same feelings about what we do. But we understand playing defense.

Why? Because things happen. Our world is filled with stories of the unexpected: Illness, injury, industry changes, economic turns, nature’s disasters, or the untimely leaving of a family member, employee, or yes, the business owner.

We believe your story should be about facing these challenges and creating a positive conclusion though a solid “defense” of strategic risk management and exit planning.

CRN 202009-237129