David CiambellaAll Articles
Transfer Stock: Gift or Sale
Recently a business owner approached me with the following: I am considering transferring some company stock to my son and possibly some talented managers. He stated, each person has made significant contributions to the business and a few of them feel they have already earned the right to some of the stock via sweat equity. He asked, should I gift or sell the stock to them? As you can probably imagine, there are other questions that need to be answered and other issues to consider before reaching the best answer. Such as: Is the issuance of stock a mechanism [...]
How Financial Independence Can Impact Succession Goals
What is financial freedom? In the context of business succession, financial freedom means accumulating sufficient liquid resources independent of the business whereby the owner doesn’t have to rely on business profits to maintain their standard of living. Why is attaining financial freedom so important for a business owner in a family business setting? Developing wealth independent from the business is paramount to an effective business transition. Financial independence affords the owners freedom to transfer some managerial and leadership responsibilities to successors without fear of them burning the entire house down. In essence, you have the opportunity to see your successors [...]
Tips for Approaching Succession Planning with Your Franchisor
A few years ago I encountered a franchisee who had successfully transferred more than $2 million of business value to his children by taking advantage of available minority discounts in conjunction with depressed goodwill and depressed real estate values — a brilliant estate planning move. The only problem was that he had not received permission from his franchisor as stipulated in the franchise agreement. Technically, this put him in violation of his franchise agreement. Fortunately, he was able to gain permission after the fact. However, some franchisees are not so lucky. In the absence of gaining preapproval, your franchisor could [...]
Family and Business: Have You Been a Cheater?
Recently a friend shared a book with me titled Choosing to Cheat, by Andy Stanley. Choosing to Cheat is a quick read, but it is very intriguing and prompted me to do a little introspection. The author begins the book by stating that everyone cheats. Now before you wonder why a succession planner is talking to you about cheating, let me explain. This is a book about what can happen when family and business collide. Cheating in the context of this book refers to giving up one thing in favor of another. Each day we make choices with regard to [...]
Financial Affairs – Eliminate Surprise For Your Loved Ones
A few years ago, a new client who lost his wife prematurely came to me with a large box full of papers that included several pieces of financial information including a dozen or so old life insurance policies. He had no idea if the life insurance policies were in force or not. Needless to say, investigating the contents of this large box was quite time consuming. During one of the lowest points in his life, losing his wife of thirty years, this gentleman and his children were tasked with pulling the pieces of their financial puzzle together. Fortunately, situations like [...]
