Archive for October, 2018
Oct
30
Financial planning professionals (FPP) take a positive step toward succession planning when they provide business owners with a comprehensive financial plan. Recommending life insurance to minimize liabilities and provide for business continuity for business owner/operators is no substitute for such a plan. But succession means different things to different advisors. The three types of succession (employee, customer, investor) do not benefit equally from life insurance or other financial products. Also, personal, business and economic timing impact an owner’s ability to successfully exit from the business. FPPs should feel free to refer the clients to a succession planning specialist in the same manner as referring to an attorney or CPA to provide their clients with the best results.
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Oct
28
Research by Dr. Azoulay at MIT and the U.S. Census Bureau which studied 2.7 million start-up founders showed more founders over age 50 compared to over age 30 had successful exits from their start-ups. Success was defined as exiting through IPO or acquisition and employment in top 0.1% five years from inception. The author points out that some articles on the subject may have misconstrued the research to encourage older entrepreneurs to form start-ups and to use their retirement assets for funding. The author shows that while age contributes to industry-specific experience and market knowledge that may indicate future success, many factors contribute to firm success. But there are other ways that start-up founders exit from their firms regardless of age including death of the firm from which loans cannot be recouped. Start-up founders should seriously consider the consequences of spending down retirement assets to fund a start-up in their 50s.
Oct
14
In a recent California Lutheran University School of Management fireside chat, former financial services executive Sandy Brown discussed her life and career and offered advice for success. Ms. Brown grew up in a small town in Indiana, faced down sexual harassment as a teenager, and learned competitive strategy while playing tennis. Her executive successes included creating diverse work units open to innovation which were popular with the internal workforce. Ms. Brown’s advice to future managers for achieving success and personal goals is threefold. First, network strategically by participating in three professional associations and one nonprofit organization. Second, don’t bad-mouth anyone. Third, if at first you don’t succeed, stop whining and move on. Having this encounter with Sandy Brown reminded the author to be intentional and proactive to achieve an unmet personal goal of serving on a board of directors.