Succeeding at Succession: Finding the Next Generation to Lead Your Company.

One area where successful owners of family and other closely held businesses consistently drop the ball is planning for the next generation of management to lead their companies. As case studies and statistics show, the key to transferring ownership and control of a business begins with the understanding that it is in fact a process that entails the resolution of many issues, often as complex and emotional as life itself–and certainly much more complex than merely transferring assets and conferring power. Here’s how some companies are succeeding at transferring ownership.

For David Mintzer, 87, founder and owner of the Port Chester-based printing company GFI, the goal to turn over the business to his 42-year-old son, Andrew, has progressed, but it has been seven years in the planning but is still not yet complete. A lawyer himself, the elder Mintzer is heeding the advice of both legal counsel and his accountant to transfer ownership through gifting stock over time. Meanwhile, his son is already a 20-year veteran of the business and successfully runs the day-to-day activities with complete autonomy.

Ben Ciccone, 75, chairman of the Poughkeepsie-based contracting firm that bears his name, found the transition to the next generation swift and unequivocal. His two sons, Brandon and Ben, Jr., now lead the road and bridge construction operations so that Ben may spend time pressing labor-management issues as the voluntary trade association chairman of the Construction Industry Council located in Tarrytown.

Then there’s Ed Mooney, 67, president and CEO of Fire Island Ferries of Bay Shore, L.I. With three adult children, all capable and successful in their own right, his ownership succession option is less clear-cut. Part of his empire will be divested through a combination of an employee stock ownership plan and a management buy out; another portion will be passed on to the next generation through a family trust; another portion still eventually will be sold and managed by his 44-year-old son Michael, who is now president of an FIF division, Penataquit Marine Construction.

Family-owned and controlled businesses like these account for 90 percent of all commercial enterprises in the U.S., but only a fraction survive to the second and third generation. This explains why preserving these enterprises has moved up high on the priority list both nationally and in states around the country. In New York, business succession planning is so important to the overall health of the state’s economy that the Empire Development Corp., the state’s economic development department, has initiated a campaign called “Ownership Transition Services” whereby a business owner can begin to explore succession planning options which generally fall into part or all of three categories: the succession to family members; the succession to employees; or succession to outside investors.

“Clearly, New York state wants to avoid the fourth option, which would be dissolution of a company that is domiciled here,” said Jan Stackhouse, director of the OTS program for the state. “Seventy percent of family-owned businesses do not make it to the second generation and only 13 percent carry on to the third generation,” she added.

Developing a plan for the transition of management and transfer of ownership of a business begins with the senior generation grasping the need for the succession planning process and becoming secure with the concept. The goal is not for an owner to simply walk into work one day and turn over the reins. The goal is for the owner to understand that the process is necessary for his or her own lifestyle and retirement needs. This is the only way to ensure that the business, which may have taken a lifetime to build, will survive and flourish.

Another aid would be to re-examine business succession planning itself. It is often misunderstood and sometimes viewed as a sort of “stepchild” of estate planning. Or it is feared as a mechanism to put the current owner of a business out to pasture at a time when he or she does not want to be viewed with less importance in the company or community. In other instances it is oversimplified as merely the end result of a boilerplate buy-sell agreement.

The failure to embrace the issue can also be traced to the personalities and emotions of the principals involved. Perhaps an owner is not sure how to select, train or develop his or her successor. How will succession play out in terms of lifestyle, company control, income and the ultimate financial security of an owner’s surviving spouse? Glossing over or avoiding entirely business succession planning may be more convenient than bringing a family face-to-face with thorny, sometimes painful issues involving which child should head the business, how parents can be fair to children who aren’t in the business, and ensuring that the next generation cares for loyal employees.

The best way to ensure that your business has a future is by planning for that day which will become the present. Experts say the cornerstone of a successful transfer process begins with ensuring that competent management is in place to run the business in the future.

“There are two key areas that must be addressed for an internal transfer to be successful: One area is ownership transfer, the other is management succession,” observes Gerald Mirra, vice president of Corporate Plans Associates, Inc., of Armonk, NY. The firm specializes in benefits consulting and business continuity planning. “A company does not have a comprehensive business continuation plan unless it deals with both of these areas.”

Perhaps it is more understandable to cast it in these terms: Management succession deals with the “people” part of the equation; ownership transfer addresses “money” issues. “The two are separate issues that may even occur on different time lines and may have different durations. To tackle both issues at the same may be a lot to ask if the timing isn’t right,” added Mr. Mirra. It may also explain why all too many family and closely-held business owners (one third are age 61 and older) have to sell outright or liquidate a part of their firm to pay estate taxes.

To paraphrase the late Erma Bombeck, family businesses, like families themselves, can often be the ties that bind and gag. From one perspective, a business founder may know in his or her heart that the day will approach when the reins of the business must be relinquished to a capable son, daughter or key person, but that doesn’t make the obstacles any less prodigious.

Upcoming articles will show how these businessmen, and others, succeeded where so many others have failed.

Are pets legally family members?

The quality of life actually boils down to:

  • are there more good days than bad days. When the bad days outnumber the excellent days, it’s time to have the conversation no animal moms and dad wants to have.
  • What treatment alternatives continue to be offered. How intrusive or aggressive a treatment is called for.
  • Exist the funds for veterinary experts which can reach 5 figures.
  • Even if there are funds, is it fair to prolong the life of an animal for a couple of months when they’re prepared to go.

They say, you’ll know in their eyes when it’s time for euthansia however that’s where rejection can appear. For example, my papa believes I’m great and could live for another couple years. My mama believes otherwise and has already selected an area to bury me in. Who among them is right? I keep telling them I’m not prepared but possibly I’m the one in denial. Concern is in the air but lots of love too. I like my everyday Reiki, cuddle time in bed and outside on the picnic blankie or on the porch. I’m moving tortoise sluggish however still like roaming in the garden. A huge warning is I’m not as interested in garden aromas as before. If I do make it up until my huge birthday, I have no interest spending time to freeze my bony ass this coming winter season. No, thank-you. I dislike the cold and I can’t stand pet stores. I hear the afterlife has environment control at a purrfect 78 degrees.

I’ve lost my hunger and I’m back on a cravings stimulant which sort of working but I’m more unsteady. I simply do not have sufficient muscle mass delegated hold myself up so my back legs are type of floppy. I can make my way down the stairs but rising is tough so I’m carried up. I cannot make it off the bed but getting up even with a step stool is iffy. My teeth are bothering me when I’m not on prescription antibiotics and I can’t be on them all the time. Surgery is high risk at this point. There is a day-to-day quality of life check-in that accountable animal father and mothers of the very old need to make but it’s easy to slip into rejection and not so easy to be unbiased specifically with worrywarts like folks. With a slow steady decrease like mine, there are bumps in the roadway like my current URI, however I’ve weathered them. Only now I’m more vulnerable.

We’re collecting funds for enrichment of the cats at shelter where Layla volunteers if you are feeling like offering a little birthday prezzy. She hadn’t remained in awhile and brought 50 mini scratchers recently and was surprised to see no toys in the cages and barely any in the cage-free spaces. When there are 100 cats, things have a way of breaking and vanishing. Layla typically uses her own cash for enrichment (toys, cardboard scratchers, catnip, Feliway). Products quickly get filthy in cages and have to be changed often. There is a PayPal donation button in the footer and any quantity is appreciated.

pet food Vancouver

birthday-cat-monday-merlin-surpriseIt’s difficult to believe this was taken just four years earlier when I could still see and was will we state, a quite boy. My eyes are no longer blue like this, not that I could see them anyhow. True beauty is more than fur deep any way. Like all cats, I do not care if my mom places on a couple of pounds, has wrinkles or bad hair days. Really, felines prefer their humans more natural without a great deal of synthetic fragrances and stinky hair spray. Our sense of is smell is so extremely established we can smell a mouse a mile away. Well at least Odin can.

It’s Monday With Merlin and I’ve been believing about birthdays. My mother, Layla is commemorating her birthday this week however won’t say which day or Cod forbid which number, will not reveal it in any group or Facebook or Twitter, so this it. Her secret birthday desire is to see me reach my 21st birthday on Oct. 2. If I do make it till my big birthday, I have no interest hanging around to freeze my bony ass this coming winter season. If you are feeling like offering a little birthday prezzy, we’re gathering funds for enrichment of the felines at shelter where Layla volunteers.

It’s Monday With Merlin and I’ve been thinking about birthdays. My mama, Layla is celebrating her birthday this week however will not state which day or Cod forbid which number, will not announce it in any group or Facebook or Twitter, so this it. She is not in the mood to celebrate and desires nothing. Well absolutely nothing for herself. Her only desire is to aid cats. Her secret birthday desire is to see me reach my 21st birthday on Oct. 2. That obviously is up to the feline gods and vicissitudes of feline fate.

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Legal Issues While On Vacation

Whether you have an interest in reserving a cabin at a Lake Chelan leasing and even just a hotel or resort, you are encouraged making your reservations in advance. As formerly mentioned, Lake Chelan is a popular holiday destination on Big Island. Because of that, there are a variety of tourists competing for the same kind of overnight lodgings you are looking for. Reserving your Lake Chelan getaway reservations in advance will help to guarantee that somebody else doesn’t snatch up your reservations prior to you get the chance making yours.

In addition to Lake Chelan condos, Lake Chelan villa are another popular type of rental readily available in the Lake Chelan location. Lake Chelan trip homes, as you most likely currently suspect, are set up like traditional homes. In truth, that is among the factors why these popular Lake Chelan rentals come so highly advised; the home-like feel. In addition a home-like feel, Lake Chelan villa are also searched for since they are private. Most vacation houses are situated on their own little piece of private land. The privacy is ideal for any getaway, however it ares better for those on a charming vacation.

Rentals in Chelan WA are thought about one of Big Island’s most popular vacation destinations. If you are interested in vacationing in Lake Chelan and you have yet to begin making your holiday reservations, specifically your overnight cottage reservations, you might want to take the time to acquaint yourself with Lake Chelan leasings.

Brought to you by The Lookout – Vacation Rentals

When it comes to Lake Chelan rentals, you will certainly discover that a number of various accommodations qualify as being a rental. Lake Chelan condos frequently come geared up with numerous spaces, consisting of bed rooms, restrooms, kitchens, living rooms, dining spaces, and much more. It is possible to discover these Lake Chelan leasings inlands, however they are quite popular along the coast.

16808677_0aade70519_o-1200x798Another typical type of Lake Chelan leasings is that of Lake Chelan vacation homes. Lake Chelan vacation homes are often large country-style houses. That is why a huge number of travelers search for the other type of Lake Chelan rental properties, the ones were the villas are shared by different travelers.

If you are interested in vacationing in Lake Chelan and you have yet to start making your getaway reservations, particularly your overnight cottage reservations, you may want to take the time to acquaint yourself with Lake Chelan rentals. In addition to Lake Chelan condos, Lake Chelan trip homes are another popular type of rental offered in the Lake Chelan location. In addition to the above discussed Lake Chelan rentals, you can likewise book a stay at a Lake Chelan hotel or trip resort. While Lake Chelan hotels and vacation resorts are not as private as the above discussed Lake Chelan rentals, they are still quite popular. In virtually all cases, you will certainly discover that it is less expensive to stay at a Lake Chelan hotel or getaway resort, than it is to rent a Lake Chelan rental. Visit Chelan WA

In addition to the above pointed out Lake Chelan leasings, you can also reserve a remain at a Lake Chelan hotel or trip resort. While Lake Chelan hotels and vacation resorts are not as private as the above pointed out Lake Chelan leasings, they are still rather popular. They are likewise money saving. In practically all cases, you will certainly discover that it is more affordable to stay at a Lake Chelan hotel or vacation resort, than it is to rent a Lake Chelan leasing. You may likewise delight in that lots of Lake Chelan resorts and hotels provide their visitors with a long list of amentias; features that frequently include room service and far more.

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Your Company and Finding A Successor

Beyond the daily rigors of staying on top of the bottom line, closely held and family-run businesses today face an even greater challenge: that of mere survival so that the next generation can own and manage the operations. According to the United States Small Business Administration, nine out of ten businesses in our country are family owned and controlled, but the odds of making the transition from the founding generation to the next are slim: only three of ten actually do. Ownership succession to a third generation is even more unlikely: less than two of ten will endure.

To avoid becoming a casualty of these statistics, the senior generation must come to grips with passing on the assets and management control to the next generation. How to pass the torch to family members is something one local businessman thought about for years based on his own painful experiences.

Ben Ciccone, the 75-year-old chairman of a successful construction contracting firm in Poughkeepsie, experienced first hand what happens when a business owner becomes paralyzed by what can be an overwhelming array of emotional, family and business issues that relate to passing the torch. His father, who founded the business in 1932, failed to complete the assignment of ownership and power to the next–Mr. Ciccone’s–generation. This inaction eventually cost Mr. Ciccone and his brother dearly.

“When my father was alive and still very active in the business, his accountant and attorney had papers drawn up, but he wouldn’t sign them. Maybe it was because he was stubborn, or maybe it was the prospect of facing his own retirement that held him back. I remember hearing him say, `I can’t let go.’ But because he wouldn’t sign the papers, we lost an enormous opportunity to take the tax breaks we were entitled to. We had to pay thousands and thousands of dollars…twice. My dad was good enough to leave everything to my mother. When she died in 1981 we had to pay estate tax again.”

Mr. Ciccone, a self-made businessman, now the proud father of two sons, a daughter and five grandchildren, learned from his father’s mistakes. “I was determined to transfer ownership to my sons because we had felt the anguish and paid the price for not doing it,” said Mr. Ciccone. “I hope that others can learn from this experience. If you want to pass on a legacy and future opportunity to the generation behind you, at some point you’ve simply got to let go.”

Even for Mr. Ciccone, the transfer of the company’s assets and power to his sons was trying. “If I didn’t do it and something happened to me, as sure as I’m talking to you now, it would have cost my kids a bundle,” he admitted. “They would be forced to sell the business to pay estate tax to the feds and state. But it still took at least three years for the transition to be final–and I was in favor of it. It’s difficult, and I can now see why so many owners don’t make it.”

With the company now in the capable hands of his sons, Brandon who is 42 and Ben “JR” who is 36, Mr. Ciccone is now able to focus on lofty though no-less important matters such as labor relations and funding programs as the association chairman of the Construction Industry Council of Westchester and Hudson Valley, Inc., in Tarrytown.

Experts universally recommend succession planning. But it is hard for business owners to enter the world of buy-sell agreements, insurance and training their successors, when they are stymied by any number of obstacles: loss of the ego they equate with being the boss; monetary insecurities; the prospect of having to choose one of their children as the next business leader; uncertainty about the next generation’s qualifications, to name a few. One problem is that these businessmen are accustomed to making objective business decisions about their businesses. But, although experts say that the business should be viewed apart from the family, these are decisions of a different ilk. These decisions require them to deal with their own mortality, the sensibilities of those they love the most, and the future of the business they have spent their lifetime building.

Then, there are the not so silent partners in all of our businesses–the federal and state tax collectors, who will exact their toll on the transfer of the business. The business must be transferred in a way that the transfer taxes won’t strangle the business or the transferring or surviving family members. Gerald Mirra of Corporate Plans Associates of Armonk, puts it this way. “The federal estate tax for large estates is essentially 50 percent of what you own. If I own the World Trade Center, I can leave it to my spouse with no federal estate tax (due to the unlimited marital deduction). But when mom dies the government would take one of those Twin Towers away.”

It is hard to generalize, because each family and each family business is unique. But, experts agree that passing the torch in a family business should be an intergenerational process that begins as early as possible, with the senior generation grasping the need and becoming secure with the concept.

“Succession options should be a topic of regular family business discussion from the outset–even if the kids are very young,” said Marlin Potash, Ed.D, a psychological business consultant based in New York City. “When everyone in the family considers if, when, and how to pass it on as an integral part of running the family business, logjams when owners die or 40-year-old ‘children’ chomp at the bit to take over can be avoided.”

Dr. Potash, who combines legal, accounting and psychological insight in her work with families and their businesses, stresses that “facing differences can lead to creative solutions to save the family business, even late in the game.”

She added, “My experience with family firms shows that the family influences the business and the business influences the family over the lifespan of each. It’s never too late to call a family meeting to address these ongoing concerns.”

At first blush, many reject the suggestion of a team approach as excessive. But that excessiveness can quickly become necessity when one reflects on the confluence of family, business, financial, tax, legal and emotional issues involved in passing the torch.