Exit Coach Radio

(20m) A Tidal Wave of Business Transfers is Coming - Will You Surf or Drown? - Jason Kwiatkowski

In this 20 minute interview, Jason Kwiatkowski, President, Valuation Support Partners Ltd. discusses the enormous amount of business transfers that will take place in the future and the best ways to prepare your business to sell or transfer effectively.

The interview was conducted by Bill Black, The Exit Coach, on The Exit Coach Radio Show - the Information Station for Age 50+ Business Owners contemplating Business Succession and Exit Planning.

Check back to listen to other content by Jason- See the "ADVISOR INDEX" on right from the Home Page 
Or listen to our many other top Advisor Guests' 20 MINUTE INTERVIEWS and 1 MINUTE AUDIO TIPS

To get updates on new content and a Weekend Summary , text "EXIT" to 22828 or CLICK HERE

We have over 150 Advisors booked and we add new content daily, so come back often! 

Please mention Exit Coach Radio to your friends!

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(20M) Focus on Growing Your Transferrable Value if You Want to Sell - Kevin Weir

In this 20 minute interview, Kevin Weir, Action Coach, discusses the importance of focusing on the tasks that will help you transfer your business more easily and for more value in the years leading up to your Exit.

The interview was conducted by Bill Black, The Exit Coach, on The Exit Coach Radio Show - the Information Station for Age 50+ Business Owners contemplating Business Succession and Exit Planning.

Check back to listen to other content by Kevin- See the "ADVISOR INDEX" on right from the Home Page 
Or listen to our many other top Advisor Guests' 20 MINUTE INTERVIEWS and 1 MINUTE AUDIO TIPS

To get updates on new content and a Weekend Summary , text "EXIT" to 22828 or CLICK HERE

We have over 150 Advisors booked and we add new content daily, so come back often! 

Please mention Exit Coach Radio to your friends!

ExitCoachRadio.com - Come Listen for a Minute!

(Article) Prevention is Better Than Cure - Bill Black

 

To grow a valuable business – one you can sell – you need to set up your company so that it is no longer reliant on you.  This can be easier said than done, especially when, like a PR consultant or plumber, what you are selling is your expertise.

To scale up a knowledge-based business, you first have to figure out how to impart your knowledge to your employees, so that they can deliver the goods. However it can be difficult to condense years of school and on-the-job learning into a few weeks of employee training. The more specialized your knowledge, the harder it is to hand off work to juniors.

The key to scaling up a service business can often be found by offering the service that prevents customers from having to call you in the first place. You have to shift from selling the cure to selling the prevention.

Fixing what is broken is typically a hard task to teach; however, preventing things from breaking in the first place can be easier to train others to do.

For example, it takes years for a dentist to acquire the education and experience to successfully complete a root canal, but it’s relatively easy to train a hygienist to perform a regularly scheduled cleaning.

It’s almost effortless for a real estate manager to hire someone to clean the eaves trough once a month, but repairing the flooded basement caused by the clogged gutters can be quite complex.

For a master car mechanic, overhauling an engine that has seized up takes years of training, but preventing the problem by regularly changing a customer’s oil is something a high school student can be taught to do.

For an IT services company, restoring a customer’s network after a virus has invaded often takes the know-how of the boss, but preventing the virus by installing and monitoring the latest software patches is something a junior can easily be trained to do.

When you’re selling your expertise, it can be tough to hire a team to do the work for you. As ironic as it sounds, sometimes the key to getting out of doing the work is to offer a preventive service, which not only maintains your business income, but also eliminates the need for someone to call you in the first place.

I hope these ideas are helpful to you!

Bill Black

(Article) Owner Preparation for a Future Exit (Part 3) - Louis Tucci

The following is the third of a 3 part article by Louis Tucci of L. Tucci Financial LLC.
You can hear his full 20 minute interview here at www.ExitCoachRadio.com tomorrow,  Tuesday, 2/18

Developing A Succession Playbook

To assist you in your planning, we recommend writing a succession playbook.  Begin by listing every key stakeholder to the business who will be affected by your exit and the impact that the exit has on each person or association. It has been said, “You cannot manage that which you cannot measure,” therefore, taking stock and measurement of those affected by your eventual departure is an important component of coming to grips with the changes the company will face.

Tipping the First Domino – Getting the Process Started

Eventually, when the initial planning is complete, your outside advisors and internal managers are aligned with your thinking and when it comes time to execute, you will need to begin the communication process.  We recommend that you organize / schedule the initial conversations with your top managers first in order to gain consensus at the top of your organization.  After their questions are asked and answered, it will get progressively easier to communicate both down the employee list as well as to outside parties.  

Concluding Thoughts

Succession planning is not an easy task and it is not something you do overnight. There are many moving parts involved with passing the torch, but with the proper succession team and transition planning, you can alleviate many of the headaches associated with this life-changing event. Start planning early; be mindful when considering the impact on your employees, customers, business relationships and vendors; develop a team of individuals who you trust to guide you through the process; have a clear and concise communication plan ready to roll out; and, develop a succession playbook. Having these tools in place will help to eliminate an environment of instability and will provide ease-of-mind as you move on to your future endeavors.

 

 

L. Tucci Financial LLC

Louis Tucci
310 Passaic Ave.
Ste 203
Fairfield, NJ 07004
973-582-1003
ltucci@financialprinciples.com
www.ltuccifinancial.com

 

Securities offered through Securities America, Inc., A Registered Broker/Dealer, Member FINRA/SIPC. Neither Forefield Inc. nor Forefield AdvisorTM provides legal, taxation or investment advice.

All the content provided by Forefield is protected by copyright. Forefield claims no liability for any modifications to its content and/or information provided by other sources.

(Article) Owner Preparation for a Future Exit (Part 2) - Louis Tucci

 

The following is the second of a 3 part article by Louis Tucci of L. Tucci Financial LLC.
You can hear his full 20 minute interview here at www.ExitCoachRadio.com on Tuesday, 2/18

Anticipating the Needs and Concerns of Others

We know that anticipating the needs of others has a positive effect on the overall success of a business.  To help alleviate the stress and anxiety associated with making this decision, it is useful to anticipate the concerns and needs of others by preparing in advance.  One way to do this is by using an outside advisor or team of advisors to guide you through transition planning before turning to ‘insiders’, i.e. those closest to you in the business.

The Use of Outside Advisors in the Early Stages of Planning

Planning an exit or a succession of your business is a lonely task at best. Having access to a team of experienced and objective external advisors can be very helpful during the initial planning stage. While it might be tempting to look within the organization for guidance and assistance, keep in mind that core employees and/or insiders generally lack the experience needed for this type of planning. In addition, you will also want to give careful consideration to the inherent conflict of interest that exists with insiders / managers, as they are likely to consider the impact that these changes will have on them personally, making it difficult to provide you with completely objective and unbiased advice.

How and When to Bring Insiders into Your Circle of Trust

After an initial stage of planning, where you get educated on the exit options and begin the process of executing on your strategy, you will eventually need to bring specific members of your leadership / management team into the planning process. Determining who to trust (as one of your insiders) and who will be the best and most effective advisors, can be a challenging task and careful consideration and thoughtfulness is in order.

As a general rule, you want to begin with one or two trusted insiders who are working at a strategic level with you in the organization.  It is expected that these senior managers can understand what you are sharing and, perhaps, even see the benefits of future ownership of the business in new hands.

An Internal Communications Plan

In any business scenario or situation, communication is a critical component and a key to success. Without clear and concise communication, outsiders (and insiders alike) may begin to speculate or fret over what the future holds. No matter the level of internal input or consensus achieved, it pays to develop a detailed list of all individuals directly impacted by the eventual succession and exit.  

For some folks, the owner’s exit may mean a promotion and/or greater responsibility. For others, having the owner move on may mean the end of their employment within the company. In some cases – where the owner manages key relationships to the enterprise – a tailored communication plan is necessary to assure relationships will remain intact and not be damaged through the succession.

The process of detailing the anticipated impact on each of these individuals is hugely valuable to owners and helps them think through the likely scenarios where others will feel the change. Having a documented “Succession Playbook,” which considers all possible scenarios, adds a dimension of organization and planning to this process which should help you, the owner, get a higher level of comfort with this inherently challenging task of communicating change through the organization.

L. Tucci Financial LLC

Louis Tucci
310 Passaic Ave.
Ste 203
Fairfield, NJ 07004
973-582-1003
ltucci@financialprinciples.com
www.ltuccifinancial.com

 

Securities offered through Securities America, Inc., A Registered Broker/Dealer, Member FINRA/SIPC. Neither Forefield Inc. nor Forefield AdvisorTM provides legal, taxation or investment advice.

All the content provided by Forefield is protected by copyright. Forefield claims no liability for any modifications to its content and/or information provided by other sources.

(Article) Owner Preparation for a Future Exit - Part 1 - Louis Tucci

The following is the first of a 3 part article by Louis Tucci of L. Tucci Financial LLC. You can hear his full 20 minute interview here at www.ExitCoachRadio.com on Tuesday, 2/18 Owner Preparation for a Future Exit An owner’s exit from a privately held business is a complex process that impacts nearly all of the people and other constituents associated with that business. As a result, many owners will not execute on an exit plan until they have a high level of comfort with how and when this large change will affect them and the people involved with their organization(s). The purpose of this newsletter is to address the types of things that owners can do in anticipation of a future exit to attain a higher level of comfort with many of the unknowns that accompany an exit strategy and implementation process. Where Effective Leadership Intersects with Personal Desires and Goals When an owner begins to consider how and when they will exit their business, they often face the dilemma of putting themselves ahead of their company, employees, vendors, customers and anyone else associated with their organization. This is often difficult to navigate because, at some level, the leadership skills that made the owner successful to begin with – such as putting other’s needs ahead of their own (i.e. employees, customers, key business relationships, etc.) – now creates a feeling of conflict when deciding to plan an exit. The owner must face the necessity of putting himself or herself ahead of everyone else, which frequently proves to be difficult. In fact, owners beginning this process often say, “My family comes first, but my employees and company are a very close second.”  Therefore, in order to strike a balance in how an exit will impact all of the different people, the owner is advised to begin to anticipate the needs of these various people and be specific in their planning.   L. Tucci Financial LLC Louis Tucci 310 Passaic Ave. Ste 203 Fairfield, NJ 07004 973-582-1003 ltucci@financialprinciples.com www.ltuccifinancial.com   Securities offered through Securities America, Inc., A Registered Broker/Dealer, Member FINRA/SIPC. Neither Forefield Inc. nor Forefield AdvisorTM provides legal, taxation or investment advice. All the content provided by Forefield is protected by copyright. Forefield claims no liability for any modifications to its content and/or information provided by other sources.

(Article) Equality and Fairness in Transfers to Kids - Bill Black

Stan Briggs was perplexed when he told his advisor, “My son, Patrick, has worked in the business for the last twelve years. In that time, the business has tripled its revenues and its profits. I’ve started to think about scaling back my activity and I realize how important it is (for my own retirement income) that Patrick be motivated to continue to grow the company profitably. Since I’d like to have him own the business someday, is there a way to start transferring it to him now? It seems unfair to make him pay for all of the business value since he created so much of it and since he is so important to my financial security. My son, of course, agrees wholeheartedly with this analysis but I’m not so sure that his mother and sister are on the same page. What issues do I need to consider?”

Equal vs. Fair

First, Stan must determine if his son is already paying for the business through “sweat equity” (more working hours, greater risk and lower compensation than he could have earned elsewhere). If so, any reduction in the purchase price is not a gift, but rather recognition of Patrick’s contribution.

Second, are Patrick's efforts adding value to the business? If so, should Patrick have to pay for his efforts by receiving a reduced share of Stan’s ultimate estate?

Third, if Patrick’s involvement in the business is critical to Stan’s retirement, Stan should consider tying his son to the business using “golden handcuffs,” such as awarding ownership if Patrick stays to run the business—and the business stays profitable.

Fourth, in many business-owning families, every child is offered the opportunity for involvement in—and ultimately ownership of—the family business. Many times, however, only one child forgoes the allure of the “outside world” to commit to working in the sometimes uncertain and illiquid world of a closely held business. (Not to mention that having you for a boss should have some payoff!)

Lastly, analyze the transfer issue in light of your own goals. Be certain that any transfer to children will satisfy your exit objectives. Explore with your advisors other issues and concerns that may arise as you begin to transfer ownership to a child. For example, how much money will you need after you leave your business? What, if anything, needs to be done for your key employees or for your other children? Temper and qualify all transfers to children in light of your over-arching exit objectives. In short, make certain the transfer of ownership to a child is also a good business and retirement decision.

Using Advisors

When considering a transfer of your business to a child, don’t underestimate the value of using experienced consultants and advisors. Their counsel, experience and input are perhaps never more important than when dealing with your own family. The need for independent, non-emotionally-charged advice can be critical. Having worked with other family businesses, these consultants along with your other advisors can offer practical advice.

Decision Framework

• First determine the level of contribution your business-active child has made to the value of the business.
• Second, determine the contribution that child must continue to make to ensure the achievement of your exit objectives. Those determinations can form the basis of what is “fair” with respect to both the business-active child and the other children.
• Third, use your advisors to help explain, guide and implement the transfer of the business.

We are happy, as always, to assist you with analyzing the issues involved with a transfer of ownership to children.

Subsequent issues of The Exit Planning Review™ provide balanced and advertising-free information about all aspects of Exit Planning. We have newsletter articles and detailed White Papers related to this and other Exit Planning topics. For more info , contact me at billblack@exitcoach.biz

What Is Exit Planning? - John Brown

Definition of Exit Planning: Exit Planning is the comprehensive approach to designing an exit strategy from a business.

It encompasses setting exit objectives (When does the business owner want to leave? To whom will he or she sell the business? etc), pulling together a team of trusted, professional advisors (a CPA, an Attorney, a Financial Advisor, etc) to participate in developing planning ideas and writing down each aspect of the transition sequence in the form of a Road Map that explains exactly what steps will be taken, when and why.

From Business Enterprise Institute Founder, John Brown

 

To hear John's full interview, and 1 minute highlights, check his folder under "index" at www.ExitCoachRadio.com - Come listen for a minute!