Your Business is the Goose, not the Golden Egg
By Peter Richards, Wealth & Legacy Advisor, Peter Richards Advisory Group
WE’VE ALL HEARD the Aesop’s Fable about the goose that magically laid golden eggs, much to the delight of the farmer. Of course, the farmer—in a twist that still holds a valuable lesson for the rest of us—kills the goose in order to get to the stash of gold that surely must be contained within. But no more goose, no more golden eggs.
As the classic fable suggests, learning to care for and protect the source of your blessings should be your primary focus—not the blessings themselves. Lots of people think their business will be their ticket to financial independence one day, but that sort of thinking can be risky.
Indeed, there are a lot of variables that are difficult to foresee and may prevent a business from becoming a payday, or which can diminish the size of a monetary event. Illness, market conditions or the potential transfer to family are just a few. And others are almost impossible to predict. For example, the tax burden is one of the biggest challenges your business faces, and it could get worse with new changes proposed by the federal government.
So instead of thinking of your business as the golden egg, think of it as the goose. The golden eggs it is creating are retained earnings in capital that have made their way to a holding company or professional corporation. Properly constructed and managed, this can create significant wealth for you and your family.
It is great to have a goal of growing business wealth and then selling your business one day. And it’s never too soon to start planning how to manage this capital and plan your exit strategy—a well thought-out plan can help you to maximize the value you receive while you are alive and what can transferred to family or possibly charity when you are gone.
But don’t forget the lesson the goose teaches: the key is to make intelligent use of golden eggs your business is laying along the way.
Peter Richards is a Wealth & Legacy Advisor at Peter Richards Advisory Group. Established in 2008, Peter Richards Advisory Group is dedicated to helping business families ensure their wealth remains intact. Clients describe Peter and his team as experts at integrating personal and corporate wealth, and identifying unknown problems. They ask thorough and tough questions in order to connect numbers to vision and values. The result is a significant positive impact on wealth. Peter can be reached at email@example.com.