Just in Case it Matters to You
- ROUGHLY TWO THIRDS OF SMALL-BUSINESS OWNERS SAY THEY ‘INTEND’ TO TRANSITION THEIR BUSINESS in the next ten years, yet surveys find six in ten have done “no planning at all” and eight in ten have “no formal advisory team or Plan in place. While sale or merger of a founder’s business generally represents their biggest impact on retirement capital, our experience is that owners typically procrastinate too long, try to save money by doing it themselves, and accordingly fail to ‘position’ for an effective transition. ‘Positioning’ for a sale or merger includes having business systems & processes to reliably-enough support financials & forecasts, ‘succession’ infrastructure sufficient to operate key aspects of the business, Brand & I.P. protection, and a multiple of other factors which will dramatically impact a buyer or acquirer’s interest and certainly Valuation.
- “AS TECHNOLOGY CONSUMES OUR LIVES, THE CONCEPT OF WORK-LIFE ‘BALANCE’ FEELS LIKE A MYTH,” since defining the line between personal and organizational balance is quite different for personality types. “All workaholics are not created equal… People who love their work because they are engaged and find meaning in it don’t necessarily need ‘recovery’ from it” – they like to blend & blur work and life, with capacity for essentially seamless integration between those domains. People with this personality trait are known as ‘integrators.’ For others, taking breaks and/or vacations “are absolutely necessary… preferring very clear boundaries between workhours and life, believing that mixing the two feels inappropriate or distracting.” Known as ‘segmentors,’ this type of person will avoid introducing family to company functions, often avoid family pictures in their office, and “even keep separate key chains for work & home.” Good managers are aware of the difference. [QZ.COM – Aug 8, 18]
- AND WHEN TRANSITION INVOLVES FAMILY SUCCESSION, PLANNING IS EVEN MORE CRITICAL. Entrepreneur business owners generally have a rough time thinking about what happens to their creation after they’re gone, and particularly sharing financial details with family members, but failure to consider the needs and expectations of family (whether working in the business or not) can create catastrophic family strife and sometimes battles, estrangement or litigation. “The key is thinking through business & family-related topics well before a crisis, or even a smooth transition,” through some type of process – often a ‘family board’ assembly which openly considers alternative scenarios, objectives, needs, intentions, and so forth. DCG have decades of experience in facilitating and mediating family issues to help avoid later anguish. [BARRONS – Aug 2, 18]
- HAS YOUR ESTATE PLAN BEEN UPDATED since the major changes in last year’s Tax Reform? For most, estate taxation is no longer an issue (at least at the Federal level), since excludable asset transfers now exceed $11 million per person. However, other important issues still remain, including: (1) Whether designated trustees & successors, executors & guardians are appropriate in today’s economic & social environment; (2) Whether property taxes will dramatically increase upon change in ownership or control at death – since transfers between parent & children are generally excludable from re-assessment, but not if properties are held in LLC, Partnership, or Corporate title; (3) Whether assets are protected from the claims of creditors, future ex-spouses or scammers; Living Trust assets are not, but other types of Trusts do – as well as making it easier for children beneficiaries to decline requests from friends/associates for loans or investments. It’s also prudent to review your Health Care Durable Power of Attorney to ensure that appointed agents are still appropriate.
- P.C. FOLLY OF THE MONTH: University of Minnesota admin has proposed a policy that students and faculty could be expelled or fired “if they refer to someone by the wrong pronoun. The policy would allow all to choose their own pronouns – including he, she, they, or ze – with ‘appropriate’ penalties for those who fail to go along.” [THE WEEK – Aug 10, 18]
- THOUGHTS FOR THE WEEK: “99% of failures come from people who have the habit of making excuses.” – George Washington Carver
A STORY FOR THE TIMES: “It had been snowing all night. So…. I made a snowman. A feminist passed by and asked me why I didn’t make a snow woman, so I modified it, but she then complained about the voluptuous chest saying it objectified snow women everywhere. The gay couple living nearby threw a hissy-fit and moaned it could have been two snowmen instead. My transgender neighbor asked why I didn’t just make one snow person with detachable parts. The vegans at the end of the lane complained about the carrot nose, as veggies are food not to be wasted as décor. I am now being called a racist because the snow couple is white and the Muslim gent across the road demands the snow woman wear a burqa. Soon the Police showed up saying someone has been offended. The feminist neighbor came out to complain again, this time that the broomstick of the snow woman needs to be removed because it depicted women in a domestic role. The neighborhood HOB Equality Officer arrived and threatened me with eviction. Then a TV news crew from the ABC showed up and asked if I know the difference between snowmen and snow-women? When I replied ‘Snowballs,’ they broadcast me as a local Sexist, plus being a suspected terrorist, racist, and homophobe, bent on stirring up trouble during difficult weather. An hour later, assuming my children are accomplices, social services takes them and Far Left protesters offended by everything are marching down the street demanding for me to be beheaded. There is no moral to this story. It’s just the world in which we live today.