October 2010 Bulletin

Understanding the People Side of Succession

By David Bradley        

President - The Succession Planning Group

THE NEED

71% of Canadians will be eligible to retire in the next ten years totalling approximately 24 million people. Many will be family or small business owners. (Canadian Federation of Independent Business data).

Aging leaders are creating a succession backlog.

NEW MARKET

This is a new market that has a different set of wants and needs.

Succession is about people who have emotions, hopes and fears. We need to understand what 'their constant throbbing pain' is.  This includes many fundamental questions:

·         "What will I do" and "where will I go?"

·         "Who has the ability and interest to take over my business?"

·         "How can my legacy continue?"

THE PHILOSOPHY

Maslow's Hierarchy of Needs: A person dying of thirst in the desert only wants one thing. Water!  They are not interested in insurance, estate, financial or tax planning. They just want water.  Our job is to find out what their urgent need is- what is their 'glass of water'.

Once this need has been met then we address what their next most urgent need is, and so on.

It is only when these emotions, hopes and fears have been acknowledged and solutions are being developed that their interest and attention can turn to the 'hard' side of succession.

THE 'SUCCESSION JOURNEY'

How do we do this?

Our role is to help each person navigate through the emotional side of succession. To do this we have developed a program called 'The Succession Journey'. This process has been specifically designed to help people who are starting a new chapter in their life.

The 'Succession Journey' is an advanced level program designed to guide a person through a process to develop a new, meaningful and focused 'life plan'.

This program allows a person to examine the three critical areas of their personal life and then the two key areas of their business life to establish the reality of 'what is - where am I?' and then determine 'where do I want to be - what do I really want and how am I going to get there?'

Using a proven in-depth, scientific assessment process we identify their inherent or natural work DNA to provide the knowledge and awareness to help them align themselves more closely to their strengths and desires.

Awareness creates knowledge. Knowledge allows informed choices and decisions to be developed, rather like jigsaw puzzle pieces, so they can be examined to see if they 'fit' the big picture as they chart their way forward.

DAVID BRADLEY

David is the founder and President of the Succession Planning Group, a Calgary based management consulting firm.

With over two decades of knowledge and experience, David understands the thought process and methodology needed to create a solid Succession Plan.

We have been helping entrepreneur and business owners since 1992. The 'Succession Journey' has helped many clients find a clear direction, a new purpose, happiness and inner peace.

David can be contacted at 403.269.1733 or david@successplan.ca.           

Nickolas Tresoor

Banking Consultant, Manulife Bank

Calgary and Surrounding Area

With the current economic uncertainty, many people are looking for ways to reduce expenses.  A relatively painless way to reduce your monthly expenses is to have a second look at the way you're managing your debt.

Over time, most of us take out a variety of loans for different purposes.  These can include things like credit card debt, car loans, home renovation loans and, of course, the mortgage.  And if you have more than one loan, you're most likely paying a different interest rate on each loan.  One of the easiest ways to reduce your monthly interest costs is to consolidate your debt at the lowest rate.  Typically, your lowest-rate debt will be a loan that is secured by an asset, such as your home. 

If you have sufficient equity built up in your home, consider switching to a product that allows you to access your equity, such as a home-equity line-of-credit.  Then, use this line of credit to repay your higher-interest loans. In this way, you'll be bringing all of your debts together into a single account, at a single rate. Some line-of-credit products even allow you to track debts separately within the account so you can continue to keep track of interest costs and repayment separately.  Not only will debt-consolidation save you interest but it will make it easier for you to keep track of what you owe and how you're progressing in paying it down.

Reducing your monthly expenses is one way to deal with economic uncertainty - and it doesn't have to be painful.  By borrowing smarter you can reduce your interest costs and increase your cash flow each month. 

If you'd like to learn how to reduce your monthly interest costs, give me a call and I can discuss some options with you.  I can be reached at (403) 984-8490.

TBSC Report: Disability Insurance and Other Smart Options- They Could Save you Money and Stress

We are all doing it.  Whether counting pennies or cutting coupons, many of us find ourselves trying to make the most of what we have.  For many people, disability insurance has been sacrificed at the altar of thrift, opted out of or refused on the basis of finance.  A group or individual benefits plan may seem like a luxury, especially when we feel we are fit as a fiddle, but it can actually save money. 

Many families have two full-time wage earners to make ends meet, plus a little for savings.  When unemployment occurs these 'rainy day' savings will help keep the family afloat.  However, being disabled is different from being unemployed.  For many who find themselves disabled or diagnosed with a major illness, the lack of income is not the only problem: it is the cost of treatment and other unexpected additional expenses.  Compounded by time, this situation essentially burns through the family income at both ends.

Additionally, there are others who find themselves in another equally dangerous situation.  They are those who have refused coverage, get injured or sick and try to get back on the plan without understanding the benefit contract.  Many carriers have 'pre-existing condition' clauses that can either prevent them from being approved, lengthen the time period before they can apply for benefits or will cut back their benefits significantly.  Once this has been done, it will be on their insurance record forever and getting future benefits will attract serious scrutiny on the carrier's part.  This, again, could result in dire economic straits for themselves and their families.

Another dangerous situation, though less so than the above, are the employees who do not have enough disability coverage.  Many group benefit plans offer 66 2/3% of gross monthly earnings of an approved disability recipient.  Could you and your family live on this amount?  To maximize your disability coverage, ask about 'top up' options.  This will allow your benefit to be an increased to an amount approved by the carrier.

Furthermore, consider looking into Critical Illness insurance.  This benefit is a lump sum benefit that will help support you and your family financially if you are diagnosed with a critical illness such as cancer, stroke, heart disease and others.  This money can be used to supplement your existing health care plan, pay for modifications to your home, access cutting edge medical treatments or just to keep your household functioning.

Finally, a note to the Employers: protect your employees by offering disability benefits.  Educate your employees about their benefit plans, the restrictions and the advantages.  By having your employees up to speed on their benefits and including them in the selection process will help to avoid each of the dangers above.  

Do not make the mistake of putting short term concerns over long term unknowns.