Imagine building your business over several decades, beginning to plan your business exit, then dying unexpectedly before you can implement your plans. Business owners rarely think about how an unexpected death or permanent incapacitation can derail even the most carefully created plans. And it makes sense: If you were always worried about what could go wrong, chances are you’d have never started your business in the first place. But as you approach your business exit, you’ll likely want to take steps that minimize the kinds of outside effects that can cause your planning to fail. One way to do that is to install Business Continuity Instructions. Business Continuity Instructions are a for... Read More
Many business owners take pride in the businesses they’ve built. Some of those owners are so proud and dedicated to their businesses that they’d be happy dying at their desks, doing what they love. They believe that they can wait until they’re ready to begin thinking about what happens when they exit the business, either by choice or otherwise. A few believe that they don’t have to plan for their exits at all. They figure that since they are willing to die in the business, there’s no point in planning for their exits. This might be a flawed mind-set. You may be asking yourself, “If I don’t plan on leaving my business, why would I need Exit Planning?” Many business owners ask us that very... Read More
Across Iowa, we are experiencing a ‘silver tsunami’ of aging baby boomers. One area of our economy we know this will affect is the changing of ownership in family-owned companies. It is well documented that only about 30 percent of family firms make it to Generation 2 (G2) and a tiny 12 percent make it to Generation 3 (G3). These transitions must be planned carefully and proactively to ensure the firm survives. So how do we do that?
Let’s consider a simplified five-step approach to help organize what can be a very challenging process:
1 Communicate Objectives/Goals/Timelines The focus here is on “Communicate”. Existing ownership and the next generation must take the time... Read More
We all know the old saying our parents told us – “when you assume, Daniel, (I always knew I was in trouble when my parents used my formal first name), you make an (fill in the blank) out of you and me.
The road to conflict in a family is paved with assumptions. (It’s also paved with perceptions, triangular conversations, and dead beat son-in-laws, but we’ll cover those topics later)
At the very top of the list of Assumptions that kill a family business is this on... Read More
Exit Planning can be complex. Between setting your exit goals and transferring your business, you’ll attempt to build business value, find an appropriate successor or buyer, navigate perplexing tax implications, and keep your key employees onboard. And that’s just a few of the things you’ll do! With so many considerations surrounding your business exit, you may want to consider creating an Advisor Team. Simply put, no single advisor has sufficient expertise to create and implement all of the activities required in a typical Exit Plan. To give yourself the best chance to exit your business on your terms, you’ll likely require the services of several advisors from different fields. These ma... Read More
By Dan Beenken, Advance Iowa program Director
August, 9, 2018
Mixing family and business – is often said to be a dangerous proposition. While that can be true, it doesn't have to be. Iowa’s economy is built on longstanding, family owned firms – so we know it’s not impossible. The key ingredient to harmony? Structure. I know most people don’t like it and would rather float along without it. But in a family-owned company, its crucial. Planning, designing, AND communicating that structure can go a long way toward reducing conflict for the next generation. Stats are often cited that less than 1/3 of all family businesses survive to the 2 nd generation, and of those, less tha... Read More