Archive for August, 2006

PASSING THE FAMILY BUSINESS TO THE NEXT GENERATION - IS IT YOUR BEST CHOICE?

Sunday, August 27th, 2006

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As Penn State professor William Rothwell ominously points out in the forward to Exit Right: A Guided Tour of Succession Planning for Families in Business Together, more than 40% of the people who run the closely held operations that comprise 80% of the North American economy will retire by 2007. It makes me wonder, what is going to happen to all of those businesses? Although it is a noble gesture, passing a business down to the next generation is more often than not, unsuccessful. In fact, statistics show that only one-third of all family businesses are successfully transferred to the next generation and only 13% are transferred onto the third generation.
Many family business consultants say the primary reason for this low survival rate is the failure to develop and effectively plan for the transfer of ownership and management of the closely held family business. I agree that this is a factor, but in my dealing with family businesses I find that there are some more fundamental reasons. The first is that the next generation has a lot different life style than the business founder and entrepreneur. They do not share the same drive and commitment that dad needed to build the business from scratch. They go to the good schools, get a taste of the good life and generally do not share the passion of the business founder. I recently was involved in selling a produce distributor. I found that most of the firms were in their second or third generation. I asked a third generation owner why this particular industry had such success with keeping the business in the family. He said, When you are up and on the docks at 3 am and work 12 hour days, you don t have the time to spend the money.
The next generation may have a grand scheme to turn the traditional printing business into a media empire or a liquor business into an entertainment enterprise. A few years back the second generation of a well known Chicago area computer leasing and IT Services Firm tried to turn it into an Internet Venture Firm with disastrous results.
Before you just assume that your torch will be carried by the next generation, make sure that the next generation even wants to run the business. Imagine the loss in value that would have occurred if the real estate billionaire from the western suburbs had turned his empire over to his son who simply wanted to produce plays.
Are your heirs even capable of running your business? Have you held on to the reins so tightly that the kids involved in the business have not been able to develop their decision-making or leadership skills? Do they command company respect because of their personal strength and skills or are they grudgingly granted respect because they are the child of the owner? If that is the case, the odds are not good for them taking over when you retire.
Another big challenge is trying to balance fairness in employing many children or even grandchildren in a family business with various skill levels, compensation levels and ownership levels. The jealousy and in fighting can absolutely grind the company s progress to a halt.
The business owner must make some difficult decisions when he or she decides it is time for them to retire. Why did I create this business? Was it to keep this business in the family for generations or was it to provide for my family for generations? If the desire and the capability of the children are not evident and the company is large enough, it may be the right decision to first get outside board members actively involved as step one. Step two would be to hire professional management to run the business. A second alternative is to sell the company while you are still running it and it can command its highest value. If you have children that want to remain in the business for the immediate future, incorporate that into the sale agreement with employment contracts.
Another way to think of it is, while I am running the business, the best ROI is to keep the bulk of my net worth invested in this company. If I am no longer running the company what is the best risk reward profile for my net worth? Would my heirs be better off if the business was sold and the value converted to financial assets?

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About the Author

Dave Kauppi is a Merger and Acquisition Advisor with Mid Market Capital, Inc. MMC is a business broker firm specializing in middle market corporate clients. We provide M&A and divestiture, succession planning, valuations, corporate growth and turnaround services. Dave is a Certified Business Intermediary (CBI), a licensed business broker, and a member of IBBA and the MBBI. Contact (630) 325-0123, davekauppi@midmarkcap.com or www.midmarkcap.com.

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Maintaining Small Town Charm In An Ever-Changing World

Saturday, August 26th, 2006

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Maintaining Small Town Charm In An Ever-Changing World

by: DeAnna Dipo

Virtually any state in the country has the appeal of multiple small towns. Ask almost anyone who lives in small town why they are here and they ll tell you they enjoy the small town feeling while being close to all the conveniences of a larger city. One of the greatest joys of living in a small town is how familiar people are with one another. When you walk into a store or restaurant you are welcomed by name. As an area grows, you risk losing the down home charm.

On the other hand, due to the growth in many areas you will find a more diverse population. This too has appeal to many. Maintaining the magic that is small town while embracing the inevitable changes that are occurring is something everyone in your community can participate in.

One of the appeals of a small town is how longtime residents frequently make an effort to get to know the new folks who move into the area. For those who are new to the area introduce yourself to your neighbors. Whether a familiar face in your town or new to the area you can host a block party to get to know your neighbors.

Knowing whom you live next to is more than a neighborly thing to do. It is also a safety measure you can put in place. Exchange phone numbers with your neighbors so that if there is ever an emergency you have someone close to call on.

For newer residence ask your neighbors about the community. Seek out a common-interest support network. On the other hand, be willing to stretch beyond your common-interest support network. Human nature is such that often we only associate with those whom we feel we have something in common with. Due to the changing face of our country, you will find there are often some incredible opportunities to learn so much about many types of people.

Familiarize your children with the neighborhood. Find activities for your children to join in on. This is a great way for young people to quickly adapt to a new area.

If you have pets, make choosing a veterinarian a top priority. Often, animals develop unfamiliar behaviors when relocated. Unfortunately, there may be occasions where an emergency situation occurs with a pet when you first move. It is best to have a good vet who you feel comfortable with rather than have to try to find one in a panic. Talk to your neighbors to find out whom they recommend.

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Check the local paper to find out about classes, seminars and events being held in the area. You may be amazed at how much goes on here. If you have a special event coming up contact the editor of this paper to let them know. The editor welcomes timely and relevant information.

Regardless of where you live in this great country, there are fantastic communities that can be enhanced by each and every one of us.

Copyright 2004 by DeAnna Dipos

Publishing Guidelines: You may publish my article in your newsletter, on your web site, or in your print publication provided you include the resource box at the end. Notification would be appreciated but is not required.

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About The Author

Completely admissible! Now that you have read till this point, we promise that additionally you will have something amazing. If you go on reading further, we hope that your interest in this would be reinforced.

DeAnna Dipo is a member of the Distinctive Properties team, a unique personalized real estate agency serving the south end of the Salt Lake valley including Draper, Riverton and Sandy. Family owned and operated, Darlene Dipo, Debbie Dahmen and DeAnna Dipo are known for the fact they live, work and play in the very community they serve. The Distinctive Properties team offers more than a run of the mill real estate experience. With their reputation and repeat business being their best referral, they offer a boutique experience and a personal relationship with each person they work with. Offering services including buying and selling, Distinctive Properties offers relocation services throughout the United States. Visit www.distinctivepropertiesSLC.com for further information.

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Want To Ensure Concentration Of Customers For Your Hawaii Condos: Bring Acceleration In Your Elevator Expression

Friday, August 25th, 2006

Your job is half done when your developed elevator speech has fortunately enticed buyer’s interest. Your elevator discourse could not only stimulate craving of the consumer but should be able to stir up their sentiments. Acquiring knowledge and practicing insight are two distinct tasks. Everyone can obtain knowledge regarding these advantageous strategies but only selected know how to employ them productively. Now, here are few fruitful cases, which can be profitable to you in invigorating consumer’s desire and expanding your Hawaii Condos industry.

Once you profitably utilize real estate instructions, you would surely get prosperity. There is a very famous Hawaii Condos supervisory businessman who once in her elevator discourse said that everyday she allowed her consultants to enjoy an extra hour. That’s excellent! But I ought to say that if she had also spoken concerning an emotional component in her discourse, then her discourse would have become much more impressive. Presume if she speaks to a health aficionado executive, then she can employ it as an emotional component in her elevator discourse. He can exercise regularly, devote additional time with his near and dear ones or can freak out in that extra hour; these sorts of wordings used in her elevator discourse can make it further indomitable and influential.

She fortified the self-assessment for regularizing the personal and professional life. Her Hawaii Condos accomplishment is sure after that. Hawaii Condos attributes are disregarded and bonuses are used up for Hawaii Condos promotion these days. You may have noticed this. Just to make your real estate message proficient and authoritative use both advantageous advantages and thought-provoking feelings in it. It aggrandizes it from the bottom floor up to the Top most level.

You could get the intended emotions from appraisal of Hawaii Condos advantages. So, analyze the Hawaii Condos advantages properly and then find at least three strong feelings that you can bond to each one. Try to follow these perceptions creatively in your elevator speech. Use affirmative and specific feelings in your speech. Crop out of your phobia of downfall. You would get more real estate proposals and high-profile projects, if you use the above given approaches. That means more profit and more advantages. Yes, it can occur! You can also rest easy on a tropical beach having a warm sunshine without being nervous for Hawaii Condos victory!

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