Many business owners believe that they want to sell their businesses to a third party when they first start considering their business exits. Owners who want to start planning for a third-party sale sometimes fear that tight-fisted buyers will be the primary enemy in the way of a successful business exit. However, experience shows that it is business owners who are their own worst enemy when pursuing third-party sales, because they succumb to two common Deal Killers. Briefly, a Deal Killer is a negative aspect of the business or its owner that can kill a deal with a third party if it isn’t resolved before the buyer learns about it. There are several Deal Killers, but two common ones are:... Read More
Building a successful business and minimizing risk may seem like opposite strategies, but typically, they go hand in hand. Once a business matures past the early, sometimes chaotic stages of development, business owners often turn toward actions that can protect them from the unexpected. Common examples of risk mitigation include purchasing life insurance on owners’ lives and insuring any assets crucial to business success. These are valid ways to minimize risk, but rarely are they enough to protect owners and their businesses as they approach their business exits. As you consider how to best protect yourself and your business from risks to your business exit, consider three often overloo... Read More
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
Via Fast Company, by Vivian Giang
Negotiation in the best of circumstances is a delicate balance and often nerve-wracking for all parties involved. But attempting to make deals with difficult, uncooperative parties can quickly escalate to a headache-inducing debacle.
When it comes to dismantling the toughest bargainers, one persuasive tactic William Ury, cofounder of the Harvard Program on Negotiation, writes about in his... Read More
Via Fast Company, by Gwen Morgan
You feel it coming—the malaise, fatigue, irritability, and lack of interest. It’s tougher to motivate yourself to do what you need to do. You’re heading toward full-fledged burnout. But the bad news is that you have zero flexibility to take time off to deal with it.
“When you’re talking about burnout, you’re talking about a spectrum,” says Paula Davis-Laack, founder of the Davis Laack Stre... 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