Business Succession Planning Newsletters by Vincent Mastrovito
Vincent has written on a wide variety of topics related to exit planning and how it affects the professional, the financial, and the personal life of business owners and their families. Click on each newsletter to read.
In January 2021 we have been discussing five challenges of family businesses. Most dialogue about family business challenges centers around the needs of the family members. Non-family employees hold essential roles within most companies, however. If they are not valued, consulted, and compensated fairly, they will leave for other opportunities, and the company will suffer the loss of their intellectual capital and experience.
In December 2020 we have explored the topic of succession planning and training the next generation for their future in the business. While many people associate succession planning with preparing family members for their future leadership roles, it also includes other roles within the company. Proactive CEOs will attract and prepare their workforce to fill all key roles in the organization from top to bottom so the company is anti-fragile and ready for any eventuality.
In November 2020 we have explored the topic of corporate governance. Effective governance requires that people in all leadership positions within an organization understand their roles and responsibilities and take them seriously. Companies that want to be stronger, more ethical, more productive, and more profitable should analyze their leadership structure and make changes as necessary to ensure they can survive internal difficulties, economic downturns, or a leadership transition. Ultimately, good governance benefits everyone associated with the company.
In October 2020 we have focused on how the values of the different generations active in the workplace at this time – Baby Boomers, Generation X, and Millennials – play into the generation gap. Working to resolve those differences and utilize the strengths of these generations can help preserve and grow family businesses. Technology is one area where younger generations can successfully take the lead.
In September 2020 we have focused on the importance of a high performance sales team to any business. We also discussed how to push your sales team members to enhance their skills and be more effective. One way to make this happen is to create a sales playbook. This playbook should be continuously updated as your sales team learns from their mistakes and successes and market conditions and company objectives shift over time.
In August 2020 we have been focusing on how to protect business value by being proactive about insurance, data security, liability, and succession planning. There are so many ways a company can be vulnerable, including hacking, lawsuits, bad weather or civil unrest, and internal strife between owners, family members, and/or employees. Becoming aware of these threats and then taking steps to mitigate them will protect your company in the short term, allowing it to build value over time.
In July 2020 we have been focusing on how to begin the process of transferring leadership of a family business to children in preparation for an eventual transfer of ownership. This process, when done correctly, takes years and provides the next generation the skills and experience they need to successfully continue the mission of the company.
In June 2020 we have been focusing on the need to carefully examine business expenses, especially for companies that are struggling financially. When the economy is robust and companies are growing, owners worry less about what exactly they are spending money on. When the economy is in recession or a unique event like COVID-19 occurs, companies go into survival mode. That’s when they need to determine what expenses count as essential and what can be pared back or eliminated to save money and keep the business going. This kind of examination helps triage in the short term and creates growth in the long run.
Our topic for May 2020 has been the need for financial planning. Creating a financial plan is a crucial part of building business value and pursuing growth in the present as well as successfully transitioning to new leadership and ownership farther down the line. It may take an investment of time and effort, but it will make all the difference in your eventual outcome.
Our topic for April 2020 has been creating family alignment. Many problems that family businesses confront may seem to business owners like isolated issues but really stem from a lack of alignment between family members. When they correct the alignment problems, the entire business runs more smoothly. If you’re wondering how it’s possible to create better family alignment, read on.
Our topic for March 2020 has been a discussion of the duties of a chief financial officer. Many smaller companies do not have a CFO on staff to advise them about day-to-day operations and financial strategy. If you wonder if your company needs a full-time or part-time CFO or how retaining one might affect its growth and stability, read on.
Our topic for February 2020 has been a discussion of why business owners stay in their companies long past the time it would be best for them to exit. Too many owners are not prepared to exit their businesses, and many haven’t even given it serious consideration. Why not?
Our topic for January 2020 has been business processes and systems. We have gone over what each of these are, why they are useful for increasing productivity and profitability, and why implementing processes and systems is valuable in terms of exit planning.
Our topic for December 2019 has been the need for businesses to have a board of directors or a board of advisors in order to keep the owner or owners accountable and provide the wisdom and support the company needs to thrive.
Our topic for November 2019 has been the need for businesses to have a current and accurate business valuation done. The first step involved in exit planning is committing to the exit planning process, but the second is having a business evaluation performed. This allows the owner to make informed decisions on every aspect of his business moving forward.
Our topic for October 2019 has been buy-sell agreements. We’ve discussed what buy-sell agreements are and why having a well drafted, comprehensive, up-to-date buy-sell agreement will protect both a company and its owners from risk during a trigger event such as the retirement or the death of an owner.
Our topic for September 2019 has been family conflict. We’ve talked about why conflicts between family members in a family business are so complex. We’ve examined the spectrum of conflicts within a company, ranging from mild disagreement to outright war. We also emphasized how important it is to resolve conflicts earlier rather than later to avoid damaging the company and family relationships beyond repair.
Our topic for August 2019 has been building transferable value as it relates to exit readiness. We’ve focused on how owners can and should differentiate between the value their businesses have to them personally and the value that they would have to buyers when put up for sale.
Our topic for July 2019 has been business attractiveness, focusing on how companies can install value drivers in order to strengthen their companies, build cash flow, and attract more buyers at sale time.
Our topic for June 2019 has been family compensation, specifically why choosing to pay family members according to their market value is better both for the family business and its family and non-family workers
Our topic for May 2019 has been understanding the different kinds of family business cultures and how culture affects how companies operate and transition to the next generation or into new ownership.
Here’s what’s new from Prometis Partners: Our topic for the month of April 2019 has been understanding family roles and responsibilities. Establishing these roles affects both how successfully your business runs now and how easy it will be to transition to the next...
Here’s what’s new from Prometis Partners: Our topic for the month of March 2019 has been determining if your company is ready for sale. This is the burning question all business owners want to know the answer to. Is Your Business Ready for Sale? The question is...
Here’s what’s new from Prometis Partners: Our topic for the month of February has been owner dependency - how business owners can determine whether their businesses are too dependent on their skills and presence and how they can address this problem before it’s too...
Here’s what’s new from Prometis Partners: Our topic for the month of January 2019 has been intellectual capital - how business owners can understand it, why it matters, and how they can increase it in the intellectual capital of their own companies. What is...