The Internal 5 for Manufacturers
In the heart of the manufacturing sector, businesses face a complex landscape of internal challenges that can hinder growth and operational efficiency. Based on empirical research and firsthand experience in the field, I've identified five core internal challenges that nearly all manufacturers wrestle with. Let's explore these hurdles and discover a solution that mirrors the super-rich yet is accessible and tailored for small to mid-sized manufacturers (under 1,000 employees).
The Challenges Unveiled
Manufacturers are consistently confronted with:
Excessive Taxation: A significant drain on resources, leaving less for investment and growth.
High Insurance Costs: Beyond health insurance, these expenses can skyrocket, affecting the bottom line.
Costly Working Capital: Accessing the funds needed for day-to-day operations, expansion, automation, or R&D is often more expensive than it should be.
Talent Acquisition and Retention: From the shop floor to the executive boardroom, finding and keeping exceptional team members is a persistent struggle.
Suboptimal Business Transitions: Many manufacturers unknowingly fail to maximize financial outcomes and reduce risks when transferring, selling, or exiting a business.
Root Causes
Manufacturers consistently suffer from the same fundamental flaws. Forgive me for being blunt, I’m a very straightforward person and this may be tough to read:
Failing to enlist top tier talent: Keeping longstanding relationships with professionals in tax, legal, investment, insurance, family governance, business advisory and other areas without regularly exploring alternatives.
Lack of Professional Collaboration: Professionals often work in silos, leading to missed opportunities for synergy and innovation.
Absence of Sophisticated Strategies: Many businesses rely on conventional methods, overlooking advanced and unconventional strategies that could yield better results.
Inadequate Vetting of Professional Relationships: There's often not enough time or an efficient process to thoroughly assess and regularly reevaluate professional relationships and how to maximize the relationship.
Fear of Deviating from the Norm: Many manufacturers hesitate to explore new approaches or professional relationships due to irrational loyalty, fear of the unknown, fear of failure, or fear of admitting they have been under-informed or led astray.
A Strategic Solution: The Virtual Family Office (VFO)
While the ultra-wealthy might opt for a Single-Family Office to navigate these challenges, such a solution is financially out of reach for most. Instead, for those in the $1 million to $100 million net-worth range, a Virtual Family Office (VFO) presents an efficient, cost-effective alternative. Here's why:
Access to Top-Tier Talent: VFOs open doors to the best in tax, legal, investment, and other critical fields, bringing unparalleled expertise to your business.
Collaboration Across Disciplines: By facilitating teamwork among various professionals, VFOs ensure comprehensive strategies that cover all bases.
Efficiency and Cost-Effectiveness: Without the need for a physical office or the overheads of traditional models, VFOs offer a lean solution to accessing elite services.
Customized, Sophisticated Strategies: Tailored to the unique needs of each business, VFOs leverage cutting-edge approaches for optimal outcomes in a peer reviewed environment.
Empowerment to Break the Mold: With a VFO, manufacturers can confidently explore innovative solutions, free from the constraints of the status quo.
The journey of a manufacturer is fraught with obstacles, but understanding these challenges is the first step towards overcoming them. By considering a Virtual Family Office, manufacturers can address these pain points head-on, securing access to top-tier expertise and collaborative, innovative strategies. This approach not only navigates the immediate challenges but sets the stage for sustained growth and success.
In essence, the VFO model embodies our commitment at Silvertree: to lift the heavy weight of complex financial problems off your shoulders, unlocking often hidden opportunities and wealth so you can reinvest back into your business, yourself, and your family.
Maximize your financial throughput with a VFO today while it is a cutting-edge strategy, before it becomes common practice.
Investment Advisory Services offered through Brookstone Capital Management (BCM) LLC, a Registered Investment Advisor. Silvertree, LLC and BCM are separate companies. This is not an investment, tax, or legal recommendation or a solicitation to become a client of the firm.
About the Author
Jason Glisczynski, CPWA®, CFP®, CAS®
CERTIFIED FINANCIAL PLANNER™ Professional
Jason specializes in helping individuals with planning for retirement and has nearly 20 years of advisory experience, is a Certified Private Wealth Advisor® professional, CERTIFIED FINANCIAL PLANNER™ professional, an Investment & Wealth Institute® member, and author of the International Best Selling Book Planning with Purpose: Solving Your Unique Retirement Puzzle.
Jason Glisczynski is co-owner and principal advisor for Silvertree, LLC. Investment Advisory Services are offered through Brookstone Capital Management (BCM) LLC, a Registered Investment Advisor. Silvertree, LLC and BCM are separate companies.