Grable’s 5-Step Help-Seeking Framework and Business Succession Planning

Chia-Li Chien, PhD, CFP®, PMP® July 22, 2018

Grable’s 5-Step Help-Seeking Framework and Business Succession Planning

Dr. John Grable is one of my favorite academics in the financial planning area. He introduced the help-seeking 5-step framework for financial planning in his 2001 research (Grable & Joo, 2001). Help-seeking is a behavior known in the research of medicine, psychology, and counseling. In general, help-seeking means a person intentionally seeks help from a secondary source. For example, I missed my period last month. I heard from many of my friends that I can still get pregnant even if I am in menopause. As much as I hate to see that I am in the aging process, I might be in menopause, but I am not sure. I certainly don’t want to be pregnant now. My husband is no help in this area. He is older than me, and he just laughs and is glad to be my emotional support.

So, I decided to make an appointment with my OB-GYN. My decision to make an appointment to see a secondary source like an OB-GYN is a help-seeking example in the medical area. That decision is what Dr. Grable described in help-seeking, a 5-step process.

The help-seeking 5-step process is somewhat linear:

In the first step, I had a medical situation where I missed my period. Step 2, I self-evaluate my situation, then move on to step 3. I identify the possible causes such as pregnancy or menopause. Step 4, I make a decision that I need to seek help from a secondary source. Step 5, I made the appointment with my own OB-GYN’s office. It took me less than one hour to complete the 5-step process, but financial situations can be more complex.

Let’s use a case study to walk through Dr. Grable’s help-seeking process in a financial planning situation. Mary has been in the import and export business for 25 years. Her son Jack is the general manager. Jack is capable but does not have any interest in taking over her business. Mary’s significant other, Ann is in stage three cancer. Ann is 10 years older than Mary. Ann is also Mary’s business partner for the last 15 years. Mary is in and out of the hospital a lot lately to help Ann. Mary’s business has been in a progressive decline in both revenue and profits for the last 5 years. Mary wants to sell her business, so she can take care of Ann and retire. Mary made an appointment to see me about her exit and retirement planning needs.

In the help-seeking process, there are several financial behaviors exhibited in Mary’s situation. In step 1: a) Mary’s business has been in decline for the past 5 years. There is a cash flow issue in her business. b) Mary is 67 and wants out of her business. c) Her emotional stress from taking care of Ann is taking her away from running her business. Step 2, Mary evaluates her situation that Jack is not going to take over her business. Mary needs to stop working to reduce her stress in life. Step 3, Perhaps Mary needs to retire and/or to sell her business so she can focus on helping Ann recover as well as move on with her retirement. Step 4, she made the decision that she will seek help. Step 5, she asked her friends who are the help providers. She made her final selection from the help providers and made an appointment to see me.

What makes a business owner recognize financial behaviors in step 1?

Well, there are seven common triggers an attorney uses in drafting the Buy-Sell agreement. They are 1) death, 2) disability, 3) voluntary or involuntary termination of employment, 4) retirement, 5) bankruptcy or insolvency, 6) divorce and 7) revocation of a professional license (Chien, Selling a Planning Practice: The Relationship between Revenue Multiple and Revenue Size., 2017). But the five common triggers (behaviors) that I often hear from perspective clients are (Chien, 2010)

• health problems
• emotional and physical drain from owning the business. Owners might lose the fire in their belly, feel bored, or be unwilling to fight another economic cycle.
• a family situation, such as a spouse’s pressure to retire, divorce, or belief by children or employees that the owner is too old-fashioned
• lack of capital to take the company to the next level, or the owner feels like he or she hits a wall
• competition or the company has been struggling

Business owners can learn from these triggers or behaviors and plan succession accordingly. Many owners might go through the help-seeking five-step process and concluded that they don’t need any secondary help sources as long as there is a plan in place to address the succession of the business. Every business needs to have sustainability. There are five common plans to consider: 1) succession plan, 2) exit plan, 3) continuity plan, 4) disaster plan and 5) merger or a tax-free exchange (Grau Sr., 2018).

I am not Moses, and will never be. I accept the nature of the aging process. I will do everything my OB-GYN doctor recommends to me while I am in menopause. Mary, too, recognizes these behaviors and understands the need to have proper planning in place to address her business’ sustainability. She follows through the sustainability plans and expects to reach her goals in two to three years.

Reference:

Chien, C.-L. (2017, Mar). Selling a Planning Practice: The Relationship between Revenue Multiple and Revenue Size. Journal of Financial Planning , 40-47.

Chien, C.-L. (2010, Jan 14). Succession Planning is Mandatory: The biggest companies in the world, including Procter & Gamble, do it. Shouldn’t you? (A. Jones, Ed.)

Grable, J. E., & Joo, S.-h. (2001). A Further Examination Of Financial Help-Seeking Behavior. Financial Counseling and Planning , Volume 12 (1).

Grau Sr., D. (2018). Sustainability and the Future of the Profession. Journal of Financial Planning , 19-21 (July 2018).