How to Protect Your Most Significant Financial Asset

As a successful business owner, your business is likely your most significant financial asset. Without a succession plan, you put your and your company’s financial future at risk.

Succession planning is one of the most difficult challenges business owners encounter. Most business owners have difficulty thinking ahead to the day they will eventually transition their company because they are fully engaged in day-to-day operational demands or they find it difficult to acknowledge that someday the time will come to think about letting go of it. As a result, they have not adequately prepared for their exit or retirement.

The effective succession of your business should begin long before your actual exit. Early and thorough planning not only helps optimize your company’s value, but it also allows you time to prepare – to form a strategy, build your team, and manage the process. The decisions you make on these issues will determine whether your business will survive after you have removed yourself from it.

Scaletta Catering is an example of a family-owned business that is well prepared for the future.

Joseph Scaletta founded the company in 1969. His sons Tony and Frank took over the day-to-day operation in 1984. Over the past 50 years, the Scaletta family has built a reputation as a premier caterer and the company is a Leading Caterer of America (LCA). LCA is a consortium of top caterers from the United States and Canada. Members are an elite group of award-winning creative and innovative catering professionals.

Tony and Frank Scaletta were proactive and prepared their business for their eventual retirement. As part of their succession plan, Scaletta Catering works to continually improve their business by innovating and leading the latest trends in the industry. The company is a member of the National Association of Catering Executives where they learn how to stay on the cutting edge of the catering industry through educational resources and national seminars.

With their commitment to customer service, Tony and Frank have learned how to develop relationships of open communication with their clients so that they can understand their customers’ needs and offer expert solutions. Dedicated to developing a qualified and successful team, they train their staff on the latest industry trends. They also have made a commitment to product innovation and embrace marketing and public relations initiatives that create brand awareness.

Also, they are preparing for the future leadership transition. Frank’s son, Robert, will eventually take over the day-to-day operation of the company when Tony and Frank retire. Robert joined the company after he graduated with a business degree from the University of Chicago. From day one, Robert knew that his position in the company was not entitled and that he was required to work hard and help the company grow. Over the years, through his hard work and dedication, Robert has expanded his role in the company.

In addition to preparing to transition future leadership, Scaletta Catering has been proactive by improving operational efficiencies by implementing more efficient processes and procedures that can be easily managed and communicated. They have improved the company’s financial strength by growing revenue and improving profitability while operating at a high level and doing more with less. The company is well-positioned to transition to new leadership when Tony and Frank retire, or before if the company encounters an unexpected reason to transfer leadership.

Do one thing: step back from your day-to-day activities and take some time for yourself to think about what you can do to prepare for the future, get started today.

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* Fictitious names and scenarios were used for this example.