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Accountants and Business Succession Planning, What's Their Role?

As a dedicated business succession planner my most important role is team facilitator. My role is to ensure that my clients have a complete planning team that represents the necessary disciplines needed to accomplish business succession, and that the team has the appropriate vision and works together effectively. Just like operating a successful business, business succession planning requires ultimate team work.

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Accountants and Business Succession Planning – How to Get More Involved

I am fortunate to have many wonderful relationships with my clients' accountants. We take a sincere interest in the each other's welfare and they recognize the high degree of personal gratification I receive from significantly impacting their clients' succession planning. The conversation often includes them telling me, "Loyd, you are doing what I have been wanting to do." So in addition to being asked my opinion of an accountant's role in succession planning, I am also asked if an accountant can be a succession planner

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Accountants and Business Succession Planning – How to Become a Succession Planner

 Accountants who seek new challenges and opportunities can be full-time dedicated succession planners. In fact there are many progressive accounting firms that have partners dedicated to being proactive in succession planning. These specialists within the accounting firm work with existing clientele and also serve as an independent profit center as they pursue new clients outside the realm of the current client base. Minimally, succession planning specialists within an accounting firm boost partner-level revenue and score project opportunities for other specialists in their practice like business valuations, feasibility studies, and research projects which are part and parcel to succession planning.

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The Pope and the Catholic Church: A Succession Planning Case Study

 As I embark on my first article as a member of The Rawls Group, I figured I might as well throw myself into the deep end and entertain a topic that is undoubtedly surrounded by controversy: religion. The recent changes occurring in the leadership of the Catholic Church have not only fascinated me, but have also led me to ponder how such a significant change to this steadfast organization will affect the group as a whole. And I am not simply talking about those directly involved in the selection of the next leader of the Catholic Church; I’m also referring to the millions of citizens around the world that look to the Pope for guidance, purpose and support. 

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Succession Planning - Art and Passion

His ball was moving right and settled in the grass about ten feet away. As the leader of the senior tournament approached, I moved close to watch an amazingly small, relatively elderly, scrawny yet pot bellied gentleman size up his next shot, consult with his caddie and select his club. He briefly simulated his desired swing, appraised the challenge and nodded to his caddie to confirm their planned ball flight over a distant tree. Without apparent concern he addressed the ball, confidently drew back his five iron in a long, fluid swing and effortlessly launched the ball in an amazing high, left to right trajectory towards the green. "Oh my Lord, can you believe how he compresses that ball to a fade? The acceleration of that ball off of his club took my breath away. And the ball cleared the tree and landed on the green like a butterfly. I'm twenty years younger, outweigh him 75 pounds and there is no way I could ever pull of that shot!"

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Reflecting On the Future - Succession Planning and Constant Changes in Federal Tax Law

What will the future bring after the last year or so of frenetic estate and business succession planning? I don't have any better crystal ball today than I had last year when I was advising clients to play "use it or lose it" with their gift and generation skipping tax credits. However one thing is for sure, estate and gift tax rates have increased to 40%. That means more liquidity will be required to transfer business interest to the next generation. After adding the State inheritance taxes most taxable estates will be taxed at 50% or more. A 50%+ transfer tax would lead me to believe that there will be no significant let up in estate planning.

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Reflecting On the Present - Succession Planning and Constant Changes in Federal Tax Law

Here it is late January 2013, and I know I am not alone feeling both emotionally and physically tired. The holidays went by like a runaway Power Point presentation. My get-up-and-go has got-up-and-left. Clients that were calling every other day are not to be heard from. They don't want to talk to me, and for a spell the feelings are mutual. With the last minute tax deal which affirmed all the estate tax, gift tax and generation skipping tax credits and exemptions that we were afraid of losing were here to stay for the moment, there is a bit of an empty feeling. There's been some soul searching generating questions such as:

 

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Reflecting On the Past - Succession Planning and Constant Changes in Federal Tax Law

The last two years have been very exciting and challenging. As soon as the Republican leaders figured out that President Obama's definition of finding compromise and achieving consensus meant everyone acknowledging that he was the only brain in the room and agreeing with his ideas, it was assumed that that the President Bush tax cuts were going bye-bye. Consequently, the estate and gift tax rates were going back to 55% and the estate, gift and generation skipping tax credits and exemption were going back to $1MM.

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Family Dynamics - The Different Child

What happens to the child who was different from the rest of the family and was ignored and neglected during childhood? This is a family dynamic that deserves attention. Children need to be noticed, comforted and nurtured to help them find their way in the world. Some children are an easy fit for their parents while other children are much harder for the parents to understand and manage. 

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Succession Planning Builds Value - Manufacturers Are Beginning to Understand and Promote the Benefits, Part 2

“Big Boy” corporations such as manufacturers and franchisers are in recovery mode from the business downturn of the last four or so years. As these organizations reflect back to lessons learned, they have identified that poor distributor succession circumstances was a critical reason they took such a financial beating.  Simply, their dealers and franchisees had spent all their time working in their business rather than on their business, which would have better prepared them to be able to weather the storm.

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6 Steps For Engraining the Succession Planning Mindset Into Business Habits

As a Certified Succession Planner™, I have the great privilege of talking with business owners, family members, family member employees, and key managers in those businesses.  In one of my most recent sessions, one of the participants asked, "How do you form the habit of thinking about succession and taking action to make sure that it happens?"

That really is a good question. We see later generation leaders vowing that what happened to them will not happen to their spouses, children, or key managers.   Even with the best of intentions, however, we still seem to set ourselves up to repeat history.

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Manufacturers Are Coming Out of the Succession Ether, Part 1

The big boys are coming out of the succession ether. These "big boys" are the franchisers and manufacturers representing a wide range of industries that rely on entrepreneurs to sell their products and make their customers happy.

Until recently, these big boys acted as though they didn't respect the talents of their distributors nor acknowledge their vested interest in their ongoing success.  The predominate opinion was:

“We don’t need to worry about the succession of our distributors; there is an endless source of replacement candidates; it is really to our advantage if a distributor fails because we get to pick a replacement that will drink our Kool-Aid.” 

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Strategic Planning and Succession Planning: What's the Difference?

I am often asked what the difference is between strategic planning and succession planning. Strategic planning and succession planning have significant similarity, both being long term endeavors with significant overlap.  The stakes are high in each endeavor. The success or failure of either will have a long-term, lasting impact upon the business. Likewise, unawareness of the importance of the initiatives or an unwillingness to address either initiative will also have an undesired, lasting impact. Therefore, this is a legitimate question meriting an extended answer to avoid confusion. 

Strategic planning is an important component of succession planning and is one of the ten interdependent factors of the Succession Matrix® that also includes: Owner Motivation and Perspective; Successor Identification and Preparation; Key Manager Motivation and Retention; Teamwork and Synergy; Business Structuring; Personal Financial Planning; Family Governance; Leadership and Management Continuity and Family Communication and Harmony. Each of these factors and their interdependence are explained in more detail on our website.

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Strategic Planning and Succession Planning: Different Goals and Teams

As I discussed in my last post, strategic planning and succession planning both are long term endeavors with significant overlap and many similarities. However, the defining and distinguishing characteristics of succession planning are reflected in the differences in these two very important leadership and management initiatives.

The differences are reflected in the goals, scope, focus and the term of these two endeavors. The purpose of strategic planning is the confirmation of goals and priorities and the optimization of business performance through the effective alignment of business resources with performance objectives. Business resources can be broken down into three general categories: time, people and money. Strategic planning endeavors to optimize synergy, productivity and efficiency by confirming priorities and establishing compatible plans for the achievement of realistic performance benchmarks.

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Strategic Planning and Succession Planning: What You Should Know About Expertise and Time Frames

As we have been discussing, strategic planning and succession planning are two different long term endeavors that have many similarities. In my previous post, we looked at the differences in the goals and scope of these two very important leadership and management initiatives. So that we can achieve even more clarification between these two, we will consider the focus and term of strategic and succession planning and how they differ.

If you have a succession plan you have a strategic plan because the Succession Matrix®considers strategic planning one of the ten interdependent factors essential to a complete succession plan. However due to the difference in scope of these two endeavors, it is important to remember that just because you have a strategic plan, you do not necessarily have a succession plan.

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Succession Planning and the "Right Time" Myth

"I probably should do something about succession planning, but the timing just doesn't seem to be right.  There's a wedding coming up, we've got another grandchild on the way, and none of our children seem to want to have anything to do with the business.  Maybe I should just sell it."

That's a distilled version of a conversation I recently overheard in an airport.  I was minding my own business, and I heard those magic few words that immediately drew me in:  succession planning.  What really struck me was how creative and rationalizing we can be when faced with actions we don't really want to take. 

In reality, the best time for succession planning is similar to the best time for planting an oak tree, twenty years ago.  But, for whatever reasons, it didn't.  So that takes us to the second best time:  today.

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Family Business Issues: How Do I Play with My Predecessor's Team?

At some point in time, the ownership and leadership batons are going to be passed to the next generation.  When that happens, there's going to be some level of trauma for everyone involved, including the new owner/leader.  When the company becomes "yours", it comes with a team of leaders and advisors that you may or may not like and whom you may or may not trust.  If you are the successor, how do you make the best of this situation?

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Family Business Harmony - It's Not An Inalienable Right

To continue my thoughts on how to find family harmony, I think the second thing we all need to remember about  family unity is that none of us have a right or entitlement to a loving, supportive, unified family. Family love and support is not an inalienable right. I contend that outstanding family business relationships, just like outstanding businesses, are achieved as the byproduct of a mystical commodity known as hard work. Those who want to achieve family and business success work beyond the pain to achieve the gain. And if you have not had a dose of reality lately, just trust me when I tell you that wherever there are relationships, there will be pain.

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When Sybil Shows Up At Meetings - How to Deal With Emotions that Impact the Succession Planning Process

In some of my recent client meetings, I’ve felt as though some of my clients that have shown up were completely different people compared to my previous interactions while working through their succession planning issues. When I called one of my clients out on this “difference” recently, it was her remark that “Sybil had shown up,” calling to mind the movie depicting a character suffering from a multiple personality disorder. Not meaning to make light of a true multiple personality issue, I’ve been using the analogy ever since, applying it to the dynamic process that I’ve learned succession planning can be.

So, how can an advisor work effectively with the dynamics of succession planning? First and foremost, we all need to remind ourselves that we’re dealing with people and people are, fundamentally, emotional. Therefore, we are dealing with emotions. Further, we need to understand that those emotions are playing out in the relationships of the people involved in and impacted by succession planning.

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Keys for Resolving Conflict in the Family Business

Recently one of my partners and I were facilitating a meeting between a father and his daughter to work through some mismatched expectations between them in the family business. We had already had several prep meetings laying the ground-work for aligning their expectations, which were all positive and headed in the right direction. They were both excited that we were going to be able to help them get some things out on the table as they typically would avoid one another and leave issues unresolved.

However, once the meeting started, the dad took the opportunity to unleash on his daughter with unanswerable questions and acted like a prosecuting attorney trying to corner the defendant into a guilty plea. My partner and I were completely unprepared for this, and of course, the daughter was equally caught off guard. When I gained my composure and realized what was going on, I interrupted the dad by checking in with daughter saying, “if I were you, I’d feel like I’m on trial right now.” She broke down into tears acknowledging that I was spot on with her emotional reaction. Fortunately, this led the way to salvaging the meeting and beginning the process of working through their differences. Later, we apologized to her for not seeing that coming and for not protecting her from her dad’s onslaught quicker.

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