Building Wealth is One Phase. Positioning it is Next

Two business partners discussing standardizing processes and succession planning. Two elements of taking a lifestyle business to the next level.

By Mike Aljancic, Managing Director

Is Your Business "Self-Running"?

The hallmark of an enterprise is transferability. To see where you stand, ask yourself two "stress test" questions:

1. The Month-Away Test: Could you walk away from your business or leadership role for 30 days—no email, no phone calls—and return to a company that is more profitable than when you left?

2. The Documentation Test: If your one or two key people leave(s) tomorrow, is there a Standard Operating Procedure (SOP) that allows a new hire to step in without a 50% drop in efficiency?

If the answer is no, you have an incredible opportunity to build value. Transition planning is simply business improvement with a deadline.

Where are the gaps in your current plan? We offer a two-minute Blueprint Assessment (no strings attached) to help you understand your alignment across the three core areas: personal, financial, and professional.

Most entrepreneurs and leaders don’t build a business with the intent of exiting

They build it to support their lifestyles. Whether you are a hairstylist with a thriving book of business or an arborist managing a fleet of trucks, you likely started with a "lifestyle" mindset: freedom, income, and being your own boss.

A business owner having a hard time not reading her email, and wondering if she needs to move away from being the head salesperson and owner.

But there is a ceiling in a lifestyle business. It is often limited by your personal hours, your individual expertise, and your physical presence. The transition from a lifestyle business to an enterprise is the moment you stop being the engine and start being the architect.

The Architecture of Growth: The Power of the Connector

CPA listening in on a business owner's call with an estate attorney and financial advisor; with the goal to help ensure that tax efficiencies are built along with clear estate plans.

One of the biggest hurdles in moving from $1M to $20M in value is "siloed advice." Your CPA handles the taxes, your estate attorney drafts the will, and your financial advisor manages the portfolio. Too often, these professionals aren't talking to each other.

At Ascend Advisory, we work to act as the connector with our clients and their support team. Imagine the efficiency of a unified strategy where your centers of influence are working together as an assemble versus being separate instruments with their own beats. This can create:

• Tax Efficiency: Your CPA and financial advisor coordinate on retirement plans, cash management and talent retention strategies that can reduce your tax bill and make your business stronger. Example: Phantom stock and deferred compensation.

• Business & Asset Structure: As you acquire property or equipment, we want to work alongside your CPA & estate planning attorney so your business, assets and real estate can potentially preserve your family’s legacy as well as the company’s balance sheet.

• Estate Planning Strategies: The ideal situations that we work in is where the business attorney, CPA and financial advisor help to protect assets through insurance, trusts and estate planning together.

When these pieces move in harmony, you aren't just aiming to save money, you are working to build a de-risked asset that can be ready for any market condition.

The Evolution of Value: A Tale of Two Journeys

An owner of a vast amount of working farmland, diversifying his portfolio beyond land to support long-term estate & succession planning.

To understand the difference between being "stuck" and "scaling," look at these two distinct paths.

The Lifestyle Trap: Not Using a Process

1 in 2 business owners exit for an involuntary reason – death, disability, divorce, disagreement, and distress*

EXPLORER	PIVOTER	TRIGGERS
Curious about what adds value? We help you explore options and connect with trusted experts.	Planning to exit in three to five years? We guide you from a lifestyle business to enterprise value—personally, financially, and operationally.	Selling soon due to a major life event? We help you avoid unsolicited offers and support a structured process of selling.

We worked with an owner in industrials—50 years old, $20M deal on the table.**

On the surface, he was successful.

But he was an Explorer – curious on exploring his option, but hadn't documented his processes. The buyer created deal terms with most of the income on the back end if he hit sales goals. When he didn't do it, he lost the upside of the deal.

He got stuck between the Explorer and Pivoter phase (someone taking it more serious with a transaction focused in three to five years and ready to pivot to a new lifestyle), eventually losing leverage and facing the "black hole" of due diligence. He had a great lifestyle, but he wasn't able to build an enterprise.

The "Strategic" Build: A $40M Evolution

Succession planning is key beyond two-three-year plans for more equipment. What happens if an owner has to suddenly exit the business because of death, disability, disagreement, divorce or distress?

Compare that to a client in Ohio, working in metal fabrication and aviation. Over decades, he shifted from working in the business as an operator, to work on the business as an owner. For 25 years, he grew a laser-centric manufacturing business to $25M+ by focusing on cloud-based maintenance and recurring contracts.

The Result: Because his business was "self-running," he sold it at an industry-high multiple to a major steel corporation and immediately pivoted it into a second deal worth $5M.

The Legacy: Today, he participates in quarterly networking groups, auditing new companies and working towards selling his third multimillion dollar company.

Because he focused on succession planning early, he didn't just exit—he evolved. He stayed professionally aligned and personally fulfilled.

34% of business owners don’t have a business succession plan*

Finding the Opportunities

Ensuring you have a "purpose" for the day after the sale is critical. Many owners who don't plan for this end up in "profound regret."

No matter what your industry, there are hidden levers in your business that can increase your valuation and your quality of life today. Coordinating the three legs of the stool:

• Financial: Ensuring you are okay after the "net-net" of taxes and broker fees.

• Professional: Building a leadership team so you can focus on vision, not day-to-day fires.

• Personal: Ensuring you have a "purpose" for the day after the sale. 75% of owners who don't plan for this end up in "profound regret."

Take the First Step

You don't need to have a "for sale" sign in the window to start this process. In fact, the best time to build an enterprise is when you have no immediate plans to leave.

Where are the gaps in your current plan? We offer a free assessment to help you understand your alignment across the three core areas: personal, financial, and professional. Take the two-minute Blueprint Assessment. 

Let’s move your business from a job or company that you own to an asset that works for you. Whether you want to sell in two years or twenty, the blueprint starts now.

*2023 Principal Business Owner Insights, conducted by Dynata Wells Fargo is not a tax advisor.

**All stories are hypothetical with names, industries and dates changes to protect the owner.