What Machu Picchu Teaches About Business Success

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Just as in construction, when building a business, one’s success depends on the time and energy spent establishing a solid foundation.

Those who know me are familiar with my love of international travel.  In particular, I am fascinated in understanding why certain structures have survived the tests of time whereas others are but a pile of rocks and rubble.

Recently a friend and I visited Machu Picchu, most famous of the Incan temples.  We were both amazed by how well preserved the buildings are, despite the fact the ancient city sits on a mountain top that has nearly 100 inches of annual rainfall in one of the most seismically active regions on earth.

Without question, Machu Picchu is an “engineering marvel.” The ancient builders invested as much effort into creating a stable infrastructure for Machu Picchu—underpinned by layers of topsoil, sandy gravel, and granite waste rock—as on the visible buildings. More than 700 terraces retained and channeled moisture and preserved soil, reducing erosion while providing space for agriculture.

I use this particularly vivid analogy to illustrate an important lesson: the more thought, time and planning one spends in constructing the foundation for a business, the more successful that business will be in weathering the storms and quakes of an uncertain and often volatile economic climate.

Over the 30+ years I have counseled business owners, the more passionate I have become in advocating these concepts.  Without exception, the businesses I have seen fail are those whose owners were so eager to “get out of the blocks” that they overlooked the key building blocks necessary to ensure their long-term viability and success.

When starting a business, it is essential to ask:

(1) Have we identified and evaluated all the potential risks involved in our particular type of business?

(2) Have we determined what type of business entity is best suited for our particular enterprise, and which will provide us the most legal protection and financial benefit?

(3)  Do we understand clearly the legal requirements and procedures we must follow in order to retain the financial benefits and legal protections the business entity can provide?

(4) Do we have a plan to protect the company and its owners in the event of a catastrophic event?

Certainly, there are a many other issues that must be considered.  If you’d like a list other questions you should be asking, email me at brian@brianaripley.com.

Why Should You Have a Business Succession Plan?

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Did you know that:

  • 95% of American businesses are family-owned?
  • Family-owned American businesses generate roughly 40% of the gross national product?
  • More than one-third of the 500 largest U.S. companies are family-owned?

A respected national survey established that:

  • 79% of small business owners say that they want to retain their business within the family;
  • 70% of second generation family members share the hope of retaining the business within the family;
  • And yet only 30% of family businesses survive into the second generation.

More than 50% of business owners have more than half of their wealth tied up in their business.  With these statistics in mind, perhaps the most shocking is that nearly three-quarters of all family-owned businesses, or approximately 73%, have no succession plan whatsoever!  The all too frequent result is that businesses devolve into conflict and chaos when a business founder dies or becomes disabled.  Decades of blood, sweat and sacrifice go quickly down the drain, all for want of a simple plan.

Among my greatest passions as an attorney is to ensure that my business-owing clients don’t become a statistic.  Together, we craft a customized plan that preserves the value of the business by establishing a clear transition process while also providing the monetary resources necessary to implement the plan without jeopardizing the ongoing financial stability of the company.

If you’re interested in starting the conversation about what you can do to safeguard your business and your family’s long-term security, join me at one of my upcoming workshops on July 31 and August 6 in Danville and Oakland.  An experienced financial counselor and I will provide an overview of the “why’s” and “wherefore’s” of business succession planning.  We’ll then invite you to schedule an initial complimentary consultation to discuss whether and how you can move forward.

For more information on how to register for one of the upcoming workshops: https://brianripley.com/business-succession-workshop


Business Succession: Planning for the What If’s Before They Happen

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As Winston Churchill famously said, “He who fails to plan is planning to fail.”  The statement is particularly relevant when considering why so many businesses fail to survive following the death, disability or retirement of a company founder or owner.

79% of small business owners say that they want to retain their business within the family; 70% of second generation family members share the hope of retaining the business within the family.  Yet only 30% of family-owned businesses survive into the second generation. Some 12% are still viable in the third generation, and only about 3% operate into the fourth generation or beyond. 

The lack of a clear, formal and well-defined business succession plan is most often cited as the primary reason a majority of small businesses don’t survive the death or disability of the founder.  Helping owners understand what they can do proactively to overcome those odds is one of my great passions as a business attorney. 

If your business currently lacks a customized succession plan, I invite you to attend one of two upcoming workshops I am presenting.  At the workshop, you’ll get to know the basic types of business succession plans, how they are funded, and why they are so critical to the long-term survival of your small business.

Further information and registration may be found on the programs page of this website: http://www.brianaripley.com/business-succession-workshop/