Posted on Tue, Apr 24, 2012
Like many Baby Boomers my age, my kids aren't really kids any more. Last week I was traveling on a grand college tour, (Paul and Molly's Excellent Adventure). She is my youngest so these are the last tours we will likely go on. It occurred to me, that we will have few times like this in the future.
I learned that at 17, she has a lot figured out (or thinks she does at least). I also learned that she will have no interest in following in my footsteps in business. That made me little sad, since I cannot coach her in her future career as I coached her in sports. I imagine a lot of Boomers are facing the same issue, especially those who own businesses. It's one thing to miss coaching, but if your succession plan includes your kids liking your business and buying it from you, and they don't, you need a Plan B.
The long trip was not as physically wearing as I first imagined. I used to travel in business 3-4 days per week, 45 weeks per year (a sales guy). In those days, travel wore me out each week. But with this new trip, I began to think about travelling in retirement with my wife. Before the kids came along, we liked long drives. I thought that I might not like long drives in the future, but after a week with my daughter (puntuated with a few days with my wife and oldest daughter), traveling was kind of fun again. I still got some work done (the wonders of free WiFi), in between the college tours (will someone come up with a less boring way to tour a school?), and saw an amazing sight: the Space Shuttle riding piggyback on a 747 over Washington DC, on its way to a museum.
All of this led me to believe that I can balance work and travel in the future. I don't need to "just travel" or "just work". I can make each a component of my future. Maybe mix in a little volunteering on the travel itinerary too.
Of course, with two college tuitions to pay for, my wife and I are more than a few years away from leaving full time work, but this long drive truly gave me hope.
You can learn more about transitions in our book, FindingYour New Owner. For a free download of Chapter One, click the button below:
About the Author:
Paul Cronin is partner and Director of Business Development at STPI, the Successful Transition Planning Institute of Cambridge, MA. STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. Paul can be reached at 978-749-9546, Facebook, LinkedIn, Twitter, Google+, or at Contact Us
TO POST COMMENTS, CLICK HERE: scroll to bottom of the blog post and click on "Comments"
For more information, visit STPI, or see this video.
The Successful Transition Planning Institute of Cambridge, MA, STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. (see video).
Posted on Tue, Apr 17, 2012
Owner's Block, What it is and How to Break it
by Paul Cronin, partner STPI
(note Paul Cronin is on vacation this week, here is a blog post from 2011 that recevied good feedback - hope you like it).
Ask yourself this question: "Is dying at your desk the best that you can do with the rest of your life?"
If you answer "no", then congratulations, you just started to break your version of Owner's Block.
An estimated seven million baby-boomer business owners will exit their companies over the next 20 years. If you are a business advisor, your clients are included. If you are such an owner, and you don't feel like thinking about it, or only have a vague idea of what you might do after you leave, then you are blocked.
Similar to what writers suffer, owners also get blocked, even though they realize that they
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are not living forever
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have much of their wealth tied up in the company (illiquid)
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may have key managers or younger family members anxious about their own future at the company
There are three emotional factors creating owner's block:
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Loss of Identity: Owners often think of owning the business as who they are; when they leave the business, they lose connections and purpose.
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Fear of the Unknown: By not acknowledging their fear of the unknown, an owner without a personal plan will sabotage a transaction for no good reason.
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Equating Leaving with Dying: Some owners view leaving a business with a sort of death; they cannot envision a life without it. Sadly, if they don't plan to leave, dying at their desk is where they inadvertently end up.
Finding Your New Owner:
When you are ready think about leaving your company, what you are really starting is the process of "finding your new owner". Obviously, that means asking “Who is the right person to take over?” and “How can I ensure that they will be successful?” CPAs, business advisors and attorneys can all help with finding the new owner and preparing the business for him/her, but that does not answer the bigger, personal question, "What will I become when I am no longer an owner?”
(to Read More get PDF of rest of this article click here)
You can learn more about business and personal transition planning in a free Report "The Four Steps to Leaving Your Business Successfully". click this button:
About the author:
Paul Cronin is partner and Director of Business Development at STPI, the Successful Transition Planning Institute of Cambridge, MA. STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. Paul can be reached at 978-749-9546, Facebook, LinkedIn, Twitter, Google+, or at Contact Us
The Successful Transition Planning Institute of Cambridge, MA, STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. (see video).
Posted on Thu, Apr 12, 2012
Groom or Hire Your Successor
by Dave Kauppi - The Exit Strategist
One of the exciting aspects of being involved in Mergers and Acquisitions is that we are constantly learning. One of our most productive classrooms is the buyer visit. In those visits the buyer's motivations, priorities, concerns, and value drivers and value detractors are often revealed.
This was the case in one recent buyer visit with our client. Her Firm is representative of many early baby boomer led firms that "started the business in their garage" (actually it was started in her living room) 25 years ago and built a successful business with an excellent brand and customer loyalty. She is now looking to exit her business and reap the rewards from her hard work in the form of a generous buy out offer.
The potential buyer is a business owner that started a similar firm at about the same time, but has morphed into part business owner and part private equity investor. He brings a unique perspective of analyzing this acquisition wearing two hats - one as a strategic industry buyer and the second as a disciplined financial buyer. It was quite instructive to watch the dual motivations at play during the visit.
While wearing his industry buyer hat, he was quite excited about the synergies of the two companies, the growth potential, and the new vertical market that the combined firm could capture. While wearing his private equity investor hat, however, that excitement was dampened by the risk that our owner had created with her company. The owner and her top producer directly touch 70% of the company's revenues. They are the face of the company. They are the "brand". They are also in retirement mind set and have not groomed a capable successor internally.
Even though we have coached our clients with the "We will stay on for a period of time to transition our relationships and transfer the intellectual capital" speech, the buyer perceives huge risk. Quite frankly, I completely agree with his thinking. As this issue was explored, it became evident that this factor would negatively impact both the transaction value and the deal structure. Translation - a discounted purchase price and much of that price deferred in the form of a multi-year earn out payment.
The good news was the buyer's strategic side recognized the value of the new vertical market our client's company would allow him to...
download rest of article in our Learning Center>>
You can read more stories in our book, "Finding Your New Owner" by Jack Beaurgard. Download Chapter One free here:
About the Author:
Dave Kauppi is a Merger and Acquisition Advisor with Mid Market Capital, Inc. MMC is a private investment banking and business broker firm specializing in providing corporate finance and business intermediary services to entrepreneurs and middle market corporate clients in a variety of industries. Email at davekauppi@midmarkcap.com
This was originally published under "The Exit Strategist" by Dave Kauppi. Used with permission.
The Successful Transition Planning Institute of Cambridge, MA, STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. (see video).
Posted on Thu, Apr 05, 2012
This is the third in a series of blogs about books on Baby Boomers. Tom Osenton at University of New Hampshire released "Boomer Destiny: Leading the US through the worst crisis since the Great Depression" in 2009.
Osenton was prescient in that he wrote the book, prior to the Wall Street banking collapse and the overall crash of the economy. Yet his words are as true now as then, although I can't say that fully I agree with his prescription.
The writer's point that the US goes through a crisis every 80 years or so, and while each generation has a role to play, one is often defined by it. FDR's generation was in power during the Great Depression, and The Baby Bomers are in power today. Our present crisis (financial wobbliness stemming from enormous government and personal debt), is a time for Boomers to define our generation as more than what some refer to as 'the most self-centered generation in history'.
I must say I have mixed emotions on our generation's ability to solve these issues. On the one hand, I meet incredibly talented people through this blog, our website and our LinkedIn group. The clients and advisors we work with are often truly amazing. But when I look at our so-called leaders in Washington and other governments around the world, I get a little depressed.
Osenton's point is that Boomers are in the "Winter" of our existence. We have a choice of what form of legacy we will leave. He states these fittingly in "Obits".
Boomer Obit: Ending #1 - A Legacy of Selfish Concern for Themselves. Essentially by not fixing the debts issue (not adusting entitlements and taxes), Boomers pass on a bankrupt nation to the next generation, who must watch the US slide into oblivion. (God, I hope not)
Boomer Obit: Ending #2 - A Legacy of Selfless Concern for Others. Boomers start giving more than they take, by adjusting to the realities of entitlements and taxes, fixing our infrastructure, setting us on a path to dramatically strengthen our country. (I kind of like the sound of that one).
So, what is your vision of the Baby Boomer's Destiny?
We have a series of articles, links, videos and podcasts on these kinds of issues on our Learning Center. Click this button to see them:
Paul Cronin is partner and Director of Business Development at STPI, the Successful Transition Planning Institute of Cambridge, MA. STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. Paul can be reached at 978-749-9546, Facebook, LinkedIn, Twitter, Google+, or at Contact Us
TO POST COMMENTS, CLICK HERE: scroll to bottom of the blog post and click on "Comments"
For more information, visit STPI, or see this video.
The Successful Transition Planning Institute of Cambridge, MA, STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. (see video).
Posted on Tue, Apr 03, 2012
This is the second in a series of books I am reading about Baby Boomers. This is about the book, "The Price of Civilization" by Jeffrey Sachs. In the book, Sachs relates some research on the subject of Happiness, by three researchers at Harvard, under the title: "If money doesn't make you happy, then you probably aren't spending it right".
While I could see how all people could use the advice, we Baby Boomers especially should pay heed, because A - we have money, and B - we have time (to read more books, hopefully). For those of us who someday may be selling a business, or leaving a partnership with a tidy sum, this might really be worth pondering (before we go out and buy that shiny new whachacallit).
The researchers made these eight findings to yield more happiness from our spending:
1. Buy experiences, instead of things, because they offer long memories to savor.
2. Use our incomes to help others instead of ourselves, because anything we do to improve our connections to others tends to improve our happiness as well.
3. Buy many small pleasures instead of a few big ones, slow down to smell the roses.
4. Buy less overpriced insurance, because we adjust much better to shocks than we suppose.
5. Pay now, consume later. Anticipating a future purchase will give us anticipatory joy, which is a sort of "free happiness". Impatient purchases give us fleeting benefits and long term debt.
6. Be attentive to the details of a purchase, since they may disproportionately affect the happiness of the experience.
7. Beware of too much comparison shopping, since it can focus our attention on unimportant distinctions.
8. Listen to others about what can bring happiness. They can add new and useful perspectives.
So, how do you find happiness, and do you spend money to do so?
If you are a business owner counting on the proceeds of a sale to fund your retirement, please download our free report, "The Four Steps to Leaving Your Business, Successfully" at this button:
Paul Cronin is partner and Director of Business Development at STPI, the Successful Transition Planning Institute of Cambridge, MA. STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. Paul can be reached at 978-749-9546, Facebook, LinkedIn, Twitter, Google+, or at Contact Us
TO POST COMMENTS, CLICK HERE: scroll to bottom of the blog post and click on "Comments"
For more information, visit STPI, or see this video.
The Successful Transition Planning Institute of Cambridge, MA, STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. (see video).
Posted on Thu, Mar 29, 2012
I just read several books related to Baby Boomers, "The Tyranny of Dead Ideas", by Matt Miller; "Boomer Destiny", by Tom Osenton; and "The Price of Civilization", by Jeffrey Sachs. To be fair, these books also relate to those younger than we Boomers, but since we have most of the money and power today - it really is up to us to make things better, or worse. I will discuss "The Tyranny of Dead Ideas" here, and will discuss the others in later blogs.
I can't say I agree with all of the author's ideas and solutions, but it did make me think (not a bad thing), of the dead ideas that business owners and advisors might also have. For example "Money Follows Merit" is one of Miller's "dead ideas" - those who excel in school, work hard and are honest, good citizens, will be rewarded with higher pay and other benefits than those who slack off, cut corners, etc.. Miller shows that simply being rich, does not connote to being meritorious. You need not look farther than the supermarket tabloids to see royalty and "Hollywood" royalty, that have too much money and not enough good things to do with it. Those who are wealthy and in charge, are not necessarily competent. They are simply wealthy.
So, how does this relate to business owners and advisors, you may ask? Ever worked for the boss' son? Ever had to advise the boss' daughter or younger brother, and walked away feeling that you just took a "dope shower"? As an owner, ever wondered if junior was up to the job? If thinking of this makes you queasy, you are seeing the deadness in the ideas that "businesses should be handed down", and those with money somehow "deserve to be in power".
If selling a business is not in your transition plans, maybe it should be. You can reward your family members with money, but not the power to blow up your business.
We talk more about this and other ideas in our book, Finding Your New Owner: For Your Business, For Your Life, by Jack Beauregard. You can download Chapter One free at the button below.
(To learn of Miller's other "dead ideas" and his new ideas to change things visit this link.)
Paul Cronin is partner and Director of Business Development at STPI, the Successful Transition Planning Institute of Cambridge, MA. STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. Paul can be reached at 978-749-9546, Facebook, LinkedIn, Twitter, Google+, or at Contact Us
TO POST COMMENTS, CLICK HERE: scroll to bottom of this blog post and click on "Comments"
For more information, visit STPI, or see this video.
The Successful Transition Planning Institute of Cambridge, MA, STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. (see video).
Posted on Tue, Mar 27, 2012
I was speaking with a renowned Estate Planning attorney who works with very wealthy family businesses about how some “Gen One” owners are resistant to selling, because they see their business as a great investment. His story was of a publicly traded business where the founding family still held several hundred million dollars in shares. The business consistently grew 15-20% per year, and handled the nasty recession pretty well.
The attorney and an investment advisor were having a meeting with “Gen One”, and talking about risk management. The advisor suggested that the client sell a majority of their shares to diversify the family’s portfolio (not just into stocks and bonds, but other investments as well). Gen One asked, “why should I accept getting 8% per year from the new portfolio, instead of 15% per year from our company?”
That’s when the investment advisor said the immortal words: “Because Sh%T Happens”. Taken aback, the client paused and said that he needed some time to think about it. A few days later, the client called the advisor to say that he’d been thinking a lot about what the advisor had said. That he thought about all that his family had built up, their charitable giving, the grandkids, as well as stories about other wealthy people who had hung on too long and got blind-sided. He did not want that to happen to his family. So he agreed to sell the majority of his shares.
I have my own story. I was an investor in a golf-related business. We were growing, but the CEO and I were at odds. It had been 4 years and my investment had grown very nicely. I hadn’t planned on selling, but an opportunity came along. They deal was scheduled to close in October, but I pressed for July and the buyer agreed. The year was 2008; the deal closed 3 months before the financial meltdown. After that, the business suffered along with the industry. In 2011, the business closed. Sh%t happens. When it comes to selling a business, you will never know if your business value is at its peak, until it’s too late. Sometimes it’s better to take some money off the table when the skies are partly sunny, and live to fight another day.
You can learn more about business and personal transition planning in our book, "Finding Your New Owner; For Your Business, For Your Life", by Jack Beauregard. For a free download of Chapter One, click below
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Paul Cronin is partner and Director of Business Development at STPI, the Successful Transition Planning Institute of Cambridge, MA. STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. Paul can be reached at 978-749-9546, Facebook, Linkedin, Twitter, Google+, or at Contact Us.
For more information, visit STPI, or see this video.
The Successful Transition Planning Institute of Cambridge, MA, STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. (see video).
Posted on Thu, Mar 22, 2012
There has been a lot of hype about "Big Data" lately, and some counterpoints that Small Data (what your customers are telling you - if you listen) is more important. I love the blog DuctTape Marketing, where the author makes the counterpoint that small data are more importatnt to smaller businesses.
So how does this impact you, if you are looking to sell your business? If you are listening to your customers, and they seem to be saying that they like you and your products, that is great. A buyer will love to hear that as well. But a buyer also looks at market trends, government regs, and cloud-based systems that your competitors are using to lower costs (and take away your customers). These are forms of Big Data that really matter.
So how do baby boomer business owners protect themselves? Get out of the office and learn. You can find real world "data" out there at trade shows, by following a blog, and by having a conversation with an M&A advisor. If your advisor doesn't understand what you mean by Big Data, you may wish to look elsewhere. Take a look at your lead management and customer management systems. Are there data in there that is telling you something about your lead sources, your referral sources or your customers' buying habits? If so, take action and talk to a marketing consultant. If your data are showing payment issues or trends, talk to your CPA, or possibly a credit card processor. Maybe it's time to get a "controller or CFO for hire".
You may not have been a math major (neither was I), but marketing whizzes and controllers/CFOs often have good skills that can dig into your small data, and may even be able to help you compare it with Big Data. Understanding your data can be the difference between a satisfactory or less than satisfactory transfer of your business.
To learn about assembling a team of advisors to help you plan a successful business transition, read "Finding Your New Owner: For Your Business, For Your Life", by Jack Beauregard. You can get Chapter One as a free download at this button:
Paul Cronin is partner and Director of Business Development at STPI, the Successful Transition Planning Institute of Cambridge, MA. STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. Paul can be reached at 978-749-9546, Facebook, Linkedin, Twitter, Google+, or at Contact Us
TO POST COMMENTS, CLICK HERE: scroll to bottom of this blog post and click on "Comments"
For more information, visit STPI, or see this video.
The Successful Transition Planning Institute of Cambridge, MA, STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. (see video).
Posted on Wed, Mar 14, 2012
Who Wants All That Stuff Boomers Have?
By Paul Cronin, partner, STPI
As I was cleaning out my attic on a remarkably warm winter day, I couldn’t help but notice how much stuff we had collected in the 19 years we have lived in this house. If you are like me (a Baby Boomer), you have collected a large amount of “stuff” over the years.
If every Baby boomer has this problem (I am sure we all do to some extent), then who will take this stuff when we need to move? My wife and I have a lovely home, too large for 3 people really. With one child in college and the other looking at colleges to attend (18 months from now), downsizing is a definite part of our future. Lots of boomers will face the same question.
I can’t imagine my kids will want their 4th grade father’s day project (I love it dearly, but it makes them squirm today). I don’t suppose anyone else will either. But what of the old couches, old TVs, printers, sports equipment, baby strollers, cribs, etc., etc.? I know that some can be “re-used”, but if they are old and outdated, who but antique dealers might want them? (As if they want a stroller with a funny stain in a rather obvious place). The dumps will be overflowing.
Now for scary question: If the next generation is much smaller than the boomers, and they don’t want our old stuff, why should we expect them to buy our old, outdated homes too? If they can buy new homes for the same or similar money, does that make our homes tear-downs, or worse? If we are planning to sell our homes and use the equity as part of our retirement plans, are we fooling ourselves? Will housing prices stay low for decades? What about our stocks and mutual funds? Will they just creep along forever? It makes the whole idea of retirement planning and transition planning a bit overwhelming.
Makes me long for those days when the kids were young and our future was way in front of us. Good thing I have that 4th grade father’s day project to keep me company....
You can learn more about transition planning in our book, "Finding Your New Owner; For Your Business, For Your Life", by Jack Beauregard. For a free download of Chapter One, click the button:
Paul Cronin is partner and Director of Business Development at STPI, the Successful Transition Planning Institute of Cambridge, MA. STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. Paul can be reached at 978-749-9546, Facebook, Linkedin, Twitter, Google+, or at Contact Us
TO POST COMMENTS,
CLICK HERE: scroll to bottom and click on "Comments"
For more information,
visit STPI, or see this
video.
The Successful Transition Planning Institute of Cambridge, MA, STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. (see video).
Posted on Tue, Mar 13, 2012
I was reading about older entrepreneurs launching new businesses in the DesMoines Register blog, and it got me thinking, should Baby Boomers be launching new businesses?
My business partner is 66 and I am 51. About three years ago, we joined forces to make the Successful Transition Planning Institute thrive. It has been a long road, but we are making it thrive at last.
But many boomers may not be in our position to do so: financially in a good place, with spouses who have employer-paid health care. In addition, we tend to go slowly, because we have a lot at risk. We have made many good financial choices, but our growth has not been meteoric.
Our work is all about "Preventing Transition Remorse", so our advice to fellow Baby Boomers is to take it slow, talk to lots of people about your idea, and make sure your spouse is 100% behind you.
Like all businesses, we have our goals, but the two that we judge most decisions against are: "Does this decision help us build a national company?" and "Does this decision help us create a legacy?". One is about growth, the other about meaning and purpose. Good transition planning can include good business planning, and vice-versa.
So to Boomers contemplating starting a business as part of their "Next Transition", I suggest thinking beyond whether your widget or service will find customers. What will it mean to you, to your family, to your community? You have had decades to build your income and (hopefully some wealth), use this time to focus on purpose and meaning. If you are going to put yourself at some risk (there is always some risk), then doesn't it make sense to have a purposeful business as part of your "success criteria"?
What do you think?
TO POST COMMENTS, CLICK HERE, scroll to "post comments".
About the Author:
Paul Cronin is partner and Director of Business Development at STPI, the Successful Transition Planning Institute of Cambridge, MA. STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. Paul can be reached at 978-749-9546, Facebook, Linkedin, Twitter, Google+, or at Contact Us
The Successful Transition Planning Institute of Cambridge, MA, STPI provides tools and training to advisors so they may help successful business owners, executives and professionals learn how to "Think", "Live" and "Decide" what to do with their companies and careers, in order to plan for a dynamic, new life. (see video).