Archive for the '02_02_Succession Planning' Category
Aug
29
Aug
9
by Chia-Li Chien, PhD candidate, CFP®, PMP® Aug 09, 2018
There is uncertainty in the financial world, all potentially correlating with current administration policies. Dr. Traversky and Dr. Kahneman’s representativeness heuristics show that when people lack certainty, they exhibit unfavorable behaviors. Evan Beach, leveraged change from TCJA to grow business by providing seminars and webinars. A fictitious financial planning practice specializing in retirement demonstrates a similar approach. Instead of focusing on accounts they manage, Financial Planning professionals should look at statistics regarding other client assets provided by the author or others to educate their clients about retirement spending. Looking at success rates from other retirement asset strategies will help clients gain clarity and help the practitioner grow business through pull marketing.
Jul
22
by Chia-Li Chien, PhD candidate, CFP®, PMP® July 22, 2018
Dr. John Grable introduced the help-seeking 5-step framework for financial planning in 2001 research. Help-seeking means a person intentionally seeks help from a secondary source. Chia-Li Chien describes a medical situation resulting in seeking a doctor’s help. Then she describes a succession-planning scenario resulting in her client seeking her advice. Both scenarios demonstrate the help-seeking 5-step process. What triggers help-seeking in financial planning? Buy-sell agreement triggers may apply (death, disability, termination of employment, retirement, bankruptcy or insolvency, divorce, or loss of professional license), but other common triggers include health problems, emotional and physical drain from owning the business, family pressures, lack of capital, and company struggles. Clients should know to seek help when business and personal pressures mount even though there may be a buy-sell agreement in place. Five common plans for business sustainability will help the business owner.
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.