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Have You Thought About Your Succession Plan?

December 4th, 2012 ::

By Karen Axelton

Do you own a family business? Do you have a business partner (or more than one partner)? Do you hope to sell your business and retire on the proceeds one day so you can spend your time playing golf? If the answer to any of these questions is “Yes,” then you need to be thinking about a business succession plan.

A succession plan lays out how your business will run if you should leave the company, sell the company, die or be incapacitated. Much like writing a will, creating a succession plan is something many business owners put off because they don’t want to think about it. But much like failing to write a will, failing to draft a succession plan could destroy your business if unforeseen incidents occur.

Begin your successon planning by thinking about who you would like to have in charge if you’re no longer in the business. This might be your business partner/s, your spouse or a child who works in the business (or even one who doesn’t). If the person you’re considering is someone who might not expect to fill this role (like your spouse), talk to him or her about the issue and whether they have any interest in filling your shoes.

Put the right legal documents in place to ease the transition. Talk to your attorney and accountant. Your form of business will affect what documents are needed. For instance, how will your shares of the business transfer to your successor? Will a buy-sell agreement be needed in case existing shareholders don’t want to work with the successor and he or she needs to buy back their shares? Just like a will, you need documentation to ensure your wishes are carried out.

Another important step in succession planning is making sure the transition is properly financed. For example, a key man life insurance policy could provide the funds for your successor to buy out partners’ shares in the event you die. Your accountant can point out financial needs that may arise and how to fund them.

Part of the financial aspect includes planning for your retirement and how you will transfer ownership and assets in the business to your successor. Again, your accountant can guide you through options such as selling the entire business, selling your shares to the successor or partners, or even selling your business to your employees.

Last, but not least, think about what would happen if illness or accident left you unable to work for a while. This could actually be an opportunity to “test drive” your succession plan by having your successor work in the business. If he or she doesn’t currently work for the company, consider having the person do so at least part time to get up to speed, or otherwise familiarizing him or her with the issues of your role.

A good succession plan will ease your worries and your family’s worries about the future of your business. (If you have a family business, it can also smooth over concerns about who will take your place.) Don’t delay in setting one up.

Image by Flickr user chispita_666 (Creative Commons)



All good things must come to an end

May 12th, 2010 ::

by Patrick Madsen

Image: CarbonNYC / David Goehring Flickrstream. Creative Commons

Finishing up this stage of your life seems like the easiest thing to do, but many forget to look at what’s involved with the next stage. Life after college can become a real bear if you are not ready for it. Many of you are beginning to feel the pinch of student loans coming soon, to worry about the big move to somewhere new, or even to fret over the lack of a job to transition into. Stress will creep into your mind, this is normal—but there is something you can do to lessen the effects it may have. Prepare yourself as early as possible.

Thinking about the future is always the hardest part because you are never sure what you are leaving out or forgetting. Let’s generally talk about what you are going to need:

  • Budget: No longer can you just spend money on whatever you want at the moment. Bills will begin to fall on your lap – not only for those pesky student loans, but also for rent, utilities, and food… you know, all those things mom and dad used to cover! Create a budget so you can figure out how much money you’ll have left over each month after you pay your bills.
  • Insurance: Make sure you have health insurance, car insurance, renters/home insurance, and even disability insurance. Extras could include vision, dental, and even maternity insurance. If any of these are not included in your benefits package, then you might want to measure the pros and cons of having it.
  • Sharpen the saw: Keep mentally, spiritually, and physically fit. Exercise and proper nutrition, no how busy you are, will assist you in coping with stress and living a healthier life. Remember to use those vacation days! They exist for a reason.
  • Office Politics/Culture: Observe your surroundings and find where you fit in. Do not come in like a gangbuster and expect to change the world. Remember there are formal and informal rules throughout each job. Pick your battles… your job is not your life!
  • Thinking of the future: At some point you are going to want to retire… or will be forced to. Consider your future when planning your budget or career. Start saving now. Think about IRA plans, mutual funds, stocks, and a comprehensive portfolio to make sure you are comfortable as you age. Remember to plan for extras such as family, car breakdowns, moving expenses, sudden illness, or whatever else life throws our way.

Let me leave you with a few things my father liked to bore into my mind. Remember, this is a man who has been in the work world for more than 35 years — most of those years with the same company. He has had many experiences and passes these experiences on to my siblings and myself. So here they are for you:

10 commandments of my dad

  1. When you get done with work, be done.
  2. Be prepared for the working world.
  3. Understand what it is you want from life and take it.
  4. Have a life.
  5. Network, network, network.
  6. Continue to learn new things so that you never get bored or stuck.
  7. Respect your boss, don’t kiss ass.
  8. Don’t be the same as everyone else. Those who are different get seen the most.
  9. Relax… after all, what’s the worst that can happen?
  10. Sometimes we have to do things we don’t like… SOMETIMES

Have a lesson you’ve learned from a parent, professor, friend, or your own working world experience? Add it below in the comments section.

Patrick Madsen, Director of Programs & Education in Career Services at the Johns Hopkins University Carey Business SchoolPatrick Madsen is the Director of Programs & Education in Career Services at the Johns Hopkins University Carey Business School. He manages the Programs & Education curriculum to include career advising services, speaker series, brand management training, and other events to help students prepare themselves for the world of work. His background includes a degree in Psychology from North Carolina State University, a masters degree in Counseling from East Carolina University, and a doctorate in Organizational Leadership/Student Affairs from Nova Southeastern University.

Personal Branding and Your Online Persona

May 4th, 2010 ::

by Patti Nuttycombe Cochran

Image: emdot / marya, Flicker Creative Commons

You need to be vigilant 24/7 on all sites where you have a presence, profile… or where you’re adding “interesting commentary or banter” publicly on friends or colleagues’ sites.

I know it’s cool to engage in “exhibitionist-speak” on Facebook or Twitter. You know what I’m talkin’ about: those self-absorbed status updates that completely don’t matter to anyone but the author?? Or posts from those whom I’m sure feel superior or RELIEVED when they’ve just blasted off on someone on some social media platform.

Stop thinking these are private sites where you can have a one-on-one confidential conversation or exchange. Always assume that whatever you post is visible, viewable, usable and confusable by the entire free world! When you operate under this assumption, your posts will be less hip, cool, clever and funny and boomerang-like…

But a lot more acceptable, safe, generic and worry free. With the fabulous internet, things are out there forever — good or bad. There are no make-goods, “ooops-I-didn’t-mean-its”! It’s forever. Always. Undeniable. Attributable.

So, with that annoying fact out in the open, here are a couple examples of career-ending blunder statements that one can’t recover from. I offer these in the spirit of helpfulness. Translation: DON’T MAKE THESE MISTAKES!

Career Ending Social Media Status Updates…

  • “I hate my client” – Never use the word HATE! Anywhere… but certainly not on a Social Media site! And, HATE and CLIENT in the same sentence???? What are you thinking? Goodbye direct deposit from your paying gig…
  • “I don’t want to deal with anymore STUPID customers” — Okay, this is only SLIGHTLY less incendiary than the example above! Goodbye direct deposit from that paying gig, AND you’ll never work for any of those clients, either!
  • “Supposed to be working” — now THIS ONE seems benign, right? I hope you answered No. Yet, Twitter is riddled with this dumb comment! Clients, bosses and others who might be depending on you read this and think, “Wait a minute… we’ve got a project to finish… he/she’s on our dime…”
  • Updating Facebook when you’re supposedly ill. This one’s particularly stupid, too, when the person has “friended” their Boss on FB! Nice. So all through the day that you’re “illin’”, the boss is watching your updates about the fun stuff you’re doing. Makes the next day at work interesting!

Remember: don’t put your brand AND your relationships at risk. Be extremely self-aware and DEFENSIVE of your image: In the flesh AND online!

Patti Nuttycombe Cochran is Vice President-Client Services Consultant at Right Management, a global provider of Career Transition services and consulting expertise on Talent Management, Leadership Development, and Organizational Effectiveness. Patti is an avid networker interested in building the region’s business and philanthropic communities.