Todd Krough, a Senior Wealth Advisor with Tealwood Asset Management was recently a guest on Julie Keyes’ podcast, “Poised for Exit.” Todd and Julie are both CEPAs (Certified Exit Planning Advisers) and launched the Twin Cities EPI Chapter in 2016 together. On this episode, they talk about the importance of business owners having a 3 pronged plan: Personal Plan (a life plan), Financial Plan, and Business Plan. Most owners struggle with the Financial Planning part because most of their wealth is tied up in the business and they don’t have much for investable assets. Todd advises that owners get started with an adviser anyway, to get a written plan in place, even if they don’t have any or many dollars to invest in the markets. “Get a plan and ease into it,” Todd says. You don’t have to go at it with great guns, just a bit at a time to become accustomed to how it works, so when your liquidity event occurs, you are familiar with investing outside your business asset. One thing Todd says is important, but many times missing between owners and their advisers, is regularly scheduled check in meetings. Todd meets with every client on a quarterly basis, and has a longer meeting on an annual basis. That way, if the strategy needs a change, there’s time to do so without fear of losing out on opportunities. Collaborating with other professional advisers to the owner is also an essential step in successful transition planning. For family businesses, Todd said that the next generation of leaders need to have their own financial planning done aside from their parents. If they are going to grow the legacy from where the parents left off, they’ll need a solid financial plan to do so that shields them from all their eggs in one basket. For more on this topic, check out the episode now.
