Archive for May, 2018
May
9
by Chia-Li Chien, PhD candidate, CFP®, PMP® May 9, 2018
Strategic Succession Planning Allows You to Smoothly Sail into the Sunset
Is your retirement dream to sail into the sunset on the profits from cashing out your business? Following this advice can make the difference between sailing on a yacht or a dinghy.
You may be surprised to learn that one-third of all businesses in the United States closed without the owners’ cashing out, according to the Small Business Administration, as cited in my book Work Toward Reward. One-third of U.S. businesses transfer internally, and one-third sell to third parties. However, according to the 2015 Capital Markets Report by Pepperdine University, 11 percent of those who sell to a third party never close the deal due to insufficient sustainable cash flow.
The lesson? To finish well, you need careful succession planning now.
This article will help you prepare for your business succession to transition you into retirement with practical succession planning strategies to reduce risk while you build equity value. (Read this article originally published in May 2018, Speaker Magazine from National Speakers Association.)
May
8
by Chia-Li Chien, PhD candidate, CFP®, PMP® May 8, 2018
“Succession is the process during which managerial control of the business is transferred from one generation to the next: it includes the dynamics preceding the actual transition as well as the aftermath of the transition,” according to a research study in 2000 (Shepherd & Zacharakis, 2000). For family businesses, there are greater challenges. Some families want to have control remain in the family; some prefer to sell to third parties. But only 23% of family businesses have formal success plans in place, according to PwC’s eighth family business survey (PwC, 2017). Without a formal succession plan in place, especially for internal transfers, the next generation may not have the attitude, aptitude and readiness to take over or assume leadership responsibility.