Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
8Activity
0 of .
Results for:
No results containing your search query
P. 1
Succession Planning Blue Paper

Succession Planning Blue Paper

Ratings: (0)|Views: 39|Likes:
Published by 4imprint
A Succession Planning Overview for Owner-Managed Companies
A Succession Planning Overview for Owner-Managed Companies

More info:

Published by: 4imprint on Jul 14, 2010
Copyright:Traditional Copyright: All rights reserved

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF or read online from Scribd
See more
See less

11/10/2012

pdf

 
SuccessionPlanning
 
© 2009 4imprint, Inc. All rights reserved
 About 60% of private businesses are owned by baby boomers. As these boomersdraw closer to retirement, succession planning and intergenerational businesstransfers become increasingly critical. Plan now to maximize value and ensure alasting legacy.
Passing the Torch andKeeping it Lit
A Succession Planning Overview forOwner-Managed Companies
Wayne Gatien began attending retirement seminars when he was only 28.His father owned PowerTel, a high voltage electrical contracting business inWhitefish, Ontario. Today, Gatien is president and chief executive of the firmand is following in his father’s footsteps, making proactive plans to transitionownership to a new leader.A key factor in Gatien’s exit strategy: delegation. “By the timeI’m 60, I should have delegated 100 percent of my job and beable to continue to work if I want to … or not,” Gatien said.“If I haven’t delegated my responsibilities by then, I’d haveto say I wasn’t successful.”
1
Such foresight is rare. Among the estimated 15 million to 18million closely held businesses in the United States, about 60percent are owned by baby boomers. Of those that plan toretire in the next 10 years, only one in 10 has a succession plan.Those are the findings of Atlanta-based financial firm WhiteHorse Advisors. The company conducted a survey to see howbusiness owners planned to leave their companies.“This has profound implications for our labor market over the next 15 years andalso for the owners and their companies,” said Patrick Ungashick, a White Horsepartner in an interview with The Atlanta Journal-Constitution.
2
 
1 Denise Deveau (2008, October 29). It helps to have a plan when it’s time to move on; Creative options exist toease the transition of passing on the reins. The Vancouver Sun, p. D.5. 2 Laura Raines (2008, November 16). Owners should have exit plan: Entrepreneurs need tax, succession strategiesfor when they step aside. The Atlanta Journal-Constitution, p. R1.
 
© 2009 4imprint, Inc. All rights reserved
Private, closely held companies account for about half of private sector payroll andnon-farm GDP. They also generated about 80 percent of new private sector jobs inthe last 10 years.
3
 Poor transition planning can lead to all sorts of problems for new owners, employeesand family. With the vast number of boomer-owned businesses turning over in thenext decade, this general lack of planning could have widespread effects.Changes in top level personnel have a significant impact on employee retention, leadership and business plans.Unplanned interruptions could result in diminishedcustomer service, employee turnover, missed businessopportunities and even a devaluation of the business.Plus, when a new leader’s performance is in question,vendors and lenders may take notice. Anticipatinglosses, banks sometimes cancel the company’s line ofcredit and vendors tighten payment terms—further hampering success.
Impact of poor planning
Tightening credit—that’s exactly what happened to Teresa Spinelli from Edmonton,Alberta, Canada. Spinelli worked in her family’s European foods store, but neverexpected to take over the business. When her brother died at age 32 and her fatherfollowed four years later, Spinelli was left in charge.
4
 Staff, who had known Spinelli since she was a little girl had, a hard time taking herseriously. When she announced her intentions to keep the company and run it herself,a few employees quit. Even vendors balked, sometimes holding shipments until theyhad received a check.
5
Spinelli soldiered on and eventually got the business back on track, but she is one ofthe fortunate ones. According to a 2005 survey from the Association of CharteredCertified Accountants in the U.K., 30 percent of small-business closures take placebecause of the lack of an effective succession plan.
6
It’s not only the businesses left behind that suffer. Poor planning can wreak havocon retirement plans as well. When new leaders fail, original owners often lose outon seller financing or revenue sharing agreements. In worst case scenarios, buyersdefault and the original owner is forced to return to work in an attempt to revivea damaged operation.
3 Laura Raines. Ibid.4 Camilla Cornell (2008, November). Surprise! You’re in charge now. Prot, 27(5), 59,61,63.5 Camilla Cornell. Ibid.6 No author. Succession planning.http://www.hie.co.uk/article-0139.html  

Activity (8)

You've already reviewed this. Edit your review.
1 hundred reads
riyasbasheer liked this
dhoni2121 liked this
rwithery liked this
rwithery liked this
macsmith0007 liked this
rhettcorby liked this
ann_nakrob liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->