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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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Succession Planner Adapts to Charlotte's Rules

Business succession planners are by nature "roadies." Succession planners are unique individuals with a diverse set of financial, investment, legal, accounting, coaching, mentoring and psychological skills that are offered in a way that is unique to each planner and compatible to a certain segment of clients. Due to the unique nature of the service and the clients, engagements are often at a distance. Therefore, travel is a fundamental part of the gig. Unfortunately traveling involves challenges which can be as demanding as my day job. Dealing with these challenges is eloquently summed up in the words of Crosby Stills and Nash: "We who are on the road, have a code that we must live by..."

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Successor Development - Trust the Trustworthy

As I go about the closely held business market working with clients and meeting prospects, Successor Preparation and Development and Exit Strategy are very active subjects. The states of mind I encounter in these business owners range from peace and excitement of their impending succession to turmoil and anxiety. Those at peace tend to have a diversity of interests beyond the business and are excited about what they will be doing when they transfer leadership and management responsibility. They are also excited about what their successors will do when they get their time at the plate as they’ve spent quality time and effort training and mentoring them. These owners are proud of their achievements with respect to making the business not dependent upon them. They neither profess perfection nor expect perfection recognizing that their successors will make mistakes and learn from them just as they once did. Most of these at peace owners believe that their successors need to hit only about as well as Hall of Famer, Ted Williams (.402), to take the business to even higher levels of success.  

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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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Succession Planning and Business Growth

“What are your goals?” is the common question I present to clients and prospects. 

“We want to grow,” is the common response I get from dealers who have found a way to make decent money in indecent times. And as though we were talking about buying filters for an air conditioner, they continue with, “and we would like to pick up a couple, three maybe four more dealerships. We know the management formula; all we need are the deals.”  

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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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Did Your Successor Just Leave?

Sometimes a telephone ring sounds ominous.  When I answered a call from Cliff last Wednesday, that proved to be the case.  "You're not going to believe what just happened.  Jack came into my office and told me he is leaving in two weeks!  I can't believe it - he's the person I've been counting on to be my successor! Now what do I do?"

"You start looking for another one," I replied.  "And this time, let us help you find someone who really wants to be number one of your organization and fits your culture.  Ambition may open the door.  It's commitment that keeps what's inside appealing."

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OPPORTUNITYISNOWHERE

Take a close look at the run together letters above?  Now, without changing the sequence of the letters, break those twenty letters into a sentence.

If you've had a particularly difficult day or few days, your sentence might read "Opportunity is nowhere."  That's most likely the case if you've gotten disappointing results after completing the "Where Are My People" (WAMP) analysis discussed in my previous blog post.  All of a sudden, you have no successor and things aren't looking real bright when it comes to the key managers and leaders within your organization either.  You might be thinking, "What have I done with that list of business brokers?  I know it's around here somewhere."

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How Financial Independence Can Impact Succession and Growth Goals

We live in the greatest country in the world! As we prepare to celebrate Independence Day, I thought it would be an appropriate time to reflect upon how fortunate we are to be Americans. Each day when we wake up, we have the freedom to choose how we will invest our time, talents and treasure. Thanks to God and our fellow Americans who have gone before us and who have made the ultimate sacrifice to provide us this luxury, we have the ability to make choices each day.  Some of us choose to invest our time, talent and treasures pursuing the American Dream by working for others while some of us choose to build businesses to provide opportunities for others and in an effort to achieve financial freedom and independence. Achieving financial freedom and independence is a challenging endeavor that requires focus, commitment and discipline.

What is financial freedom? Financial freedom implies that one has enough income to maintain their standard of living and therefore has the ability to pursue other interests outside of employment.  Financial freedom in the context of business succession means accumulating enough liquid resources independent of the business whereby you are not financially dependent upon the business to maintain your standard of living.  As a business owner in a family business setting, why is attaining financial freedom so important?

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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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