miller remodeling redesign my bathroom adding a floor to an existing house huntley kitchen construction ranch house addition over garage .. Chicago Drug testing

Succession Planning: Problems Getting Started

A survey released by the American Institute of Certified Public Accountants in the spring of 2005 illustrates a widespread problem on the lack of succession planning [deciding who will take over running the firm when the current managers die or retire]. The survey found that 60% of responding certified public accountant (CPA) firms have owners who are in the 55-to-62-year-old age bracket, and more than half (56%) have at least one partner who will retire in the next five years. However, according to the survey, 81% of these firms still do not have a written succession plan in place. Among those firms with annual revenues under $150,000, the percentage rose to 96%. If we polled small businesses in other fields, the percentages would be comparable: around 80% of small business owners have no succession plans.

Similarly, the Canadian Federation of Independent Business (CFIB) reports about 40% of small and medium business owners in Canada plan to leave or retire in the next five years, and 70% plan to leave or retire within 10 years. However, roughly two-thirds of the 4,300 Canadian businesses that responded to the federation's survey have completed no succession planning. Small and medium businesses account for about half of the jobs in the Canadian economy, and potentially more than two million jobs could be at risk to inadequate succession planning.

For many of these small and medium business owners, the practices they have built up are their most valuable assets as well as their primary retirement assets. But these owners believe they have plenty of time to arrange for succession. Many business owners put off dealing with succession because it is the least urgent matter on their plate. Too often business owners cannot stand the idea of letting go of an entity they created and for which they toiled to achieve success. Apparently, these small and medium business owners need assistance both in formulating plans and in actual transitioning to future managers and owners of the firm.

Succession planning, like tax planning, is just good common sense and should be a natural part of good business practices. As soon as business owners take out life insurance policies to protect their assets for dependents left behind, they need to think of succession planning. If business owners have children who do not wish to follow in their parent's business, then the business owners need to think realistically about the price they would be willing to sell the business to outsiders. In one sense, these business owners who plan to sell to outsiders are lucky that they can avoid the emotionally divisive issue of having to select a business heir from competing adult children or competing managers.

Succession planning would not be needed if the owner intended to wind down operations upon his retirement, but only 4% of the Canadian small and medium businesses that responded to the CFIB plan to close down their firms. The response from American small business owners would probably be similar. Yet without adequate succession planning, the firms could be in disarray upon the owners' retirement and unfortunately the businesses might fade away.

Inevitably, succession planning forces many owners to agonize over whether to pass on their business to family, employees, or a private buyer. They also worry about selling at the right price and finding a buyer who will treat the business and staff well. All of this planning occurs at a time when they are considering retirement and the other changes in their life that will occur when they are no longer running a business. As a rule of thumb, business should start developing a succession plan at least five years before the owner hopes to step aside or as soon as the corporation acquires capital assets with significant value. It can take up to two years to sell a small business.

About 30 per cent of successions feature the previous owner advancing a loan or seller financing to the buyer, because small business bank loans are difficult to get from a bank. When there are no family members interested, small business owners should consider handling their succession through life insurance. But few small and medium business owners have that kind of foresight.

Dr. Michael A. S. Guth, Ph.D., J.D., is a risk management consultant and practicing attorney at law based in Oak Ridge, Tennessee. In addition, Dr. Guth is a financial quant and former investment banker, having worked for Credit Suisse First Boston and Deutsche Bank in London and Frankfurt. He specializes in developing investment strategies and strategic plans for small and medium-sized companies, as well as mergers and acquisitions for large corporate clients. For five years, he consulted to the electric power and gas industry in the USA, and even managed the Middle Office (financial risk control) groups for two trading floors.

Dr. Guth has taught over 30 courses on-line at the undergraduate and graduate level on topics ranging from Managerial Economics to Strategic Management to Business Law. He can be reached through web page http://riskmgmt.biz/economist.htm

In The News:

Mobile Franchise Business Expansion Strategy

If you own a mobile franchise business and wish to... Read More

Strategy Without Tactics is Futile

From time to time there seems to be a flurry... Read More

10 Critical Facts to Put On the Cover of Your Business Plan...

In most business plans, no matter how striking the idea,... Read More

Don?t Just Talk About the Weather, Use It to Advantage

A well known, national chain of restaurants discovered that certain... Read More

Innovate Today for Great Leaps Forward Tomorrow

How often does your company make a quantum leap forward?... Read More

The Accountability/Alignment Process: Three Steps to an Accountable Organization

The Accountability/Alignment Process: Three Steps to an Accountable Organization Generating... Read More

Why You Need a Business Planning System NOT a Business Plan

When someone mentions business planning we have been conditioned to... Read More

Could You Be Setting Your Business Plan Up For Failure?

David E. Gumpert, author of Burn Your Business Plan, often... Read More

Take A Systems View To Ensure Your Business Stays Healthy

How are you feeling today? Good, not so good, great?... Read More

How to Write a Business Plan in Five Steps

People often ask "What makes a good business plan? Or,... Read More

How To Get More Business During The Winter Months

Business seems to drop, slow or even stop during the... Read More

Business Problem Solving

Is there really anything as a problem? Does chaos or... Read More

Consolidation in the Software Industry is Hardly New: Obsess About It or Risk Losing it All

Some analysts credit [Larry] Ellison with anticipating the consolidation in... Read More

8 Ways to Earn More Without Working Harder

Conventional wisdom has it that there are only three ways... Read More

Balanced Scorecard Strategy Map

With the help of balanced scorecard strategy map, it is... Read More

Legal Strategies in Business Plans

Writing a Business Plan these days is tough, venture capitalists... Read More

Secrets Of Effective Brainstorming

Have you been in a "brainstorming" session where each person... Read More

During the election we heard about Ohio?s Economy

Much of what we heard in the mass media about... Read More

More Uses for Your Business Plan

You have invested a lot of time and energy on... Read More

Business Plan Long Term Goals

Writing a business plan is not an easy endeavor, nor... Read More

Do You Really Need a Business Plan?

"I don't need a business plan."Neither did Alice in Wonderland."Would... Read More

The Power of Planning

I am surprised how few sales professionals, independent consultants, and... Read More

Three Steps to Give Your Strategic Plan Traction

We all agree Strategic Planning is a critical part of... Read More

Own Your Niche by Building a Niche Community

In 1997, David Steele was making the transition from a... Read More

Creating a Vision That Achieves Results

How important is a vision statement to your company or... Read More

induction self-ballasted kumho induction lighting 2 Pete's produce ..
induction self-ballasted kumho induction lighting 2 Pete's produce ..