January 2017 eNewsletter
Setting Course for Success: New Year’s Resolutions for the Family Business
Crystal Faulkner & Tom Cooney Partners, MCM CPAs & Advisors
Happy New Year! We’re very excited about the many new possibilities 2017 could bring for our lives and businesses, and you should be too. We really like the quote from Wayne Dyer, “If you change the way you look at things, the things you look at change.” This is a powerful idea to keep in mind as you plan the future of your business. It can be the guiding hand by which fresh resolutions and goals can emerge. Here is what we are encouraging our clients to consider for the New Year:
Reflect on today
Reviewing where your business is today is the key to getting started with any resolution process. You must know where your business is now to move the needle forward. Take the time to identify and assess specific metrics, such as number of employees, amount of debt, number and type of clients, product/service offerings, cash flow and profitability, etc. that impact your business. Develop a dashboard-type of recordkeeping system so that you can track these metrics year-over-year (and even month-over-month). This will help with future analytics and planning. It will allow you to compare behavior to results. Over time, you will be able to identify trends and allow you to directly predict success based on activity.
Look to the future
The second step is taking the time to really think about where you want to be one year from now, five years from now, ten years from now and so on. As an entrepreneur and owner of a business, it is your job to anticipate and plan for the future. Put your vision in writing, and keep it somewhere handy for an easy reminder. Be as specific as possible when thinking about what your business will look like. For example, identify how many offices you will have and where, how many employees you’d like to have and when, projected revenue and profit amounts, etc. Get your management team, and in particularly any key stakeholders, involved so they also have involvement in the process, and likewise in the results. Ensure that the next generation understands how the decisions made today will impact the operation they will inherit in the future.
Measure and monitor
Once you and your team have together identified your company's 2017 goals including value drivers for your organization, create a written list of specific issues and challenges that must be resolved in order to achieve your one year plan. Prioritize your list and assign the most important tasks to specific individuals in your organization along with an agreed upon completion date. Monitor progress weekly to ensure the responsible person is on course. Use a scorecard to track the progress of your organization weekly, monthly and quarterly. As issues are resolved and removed from the list, add others with the next highest priority to ensure you stay on track with your 2017 goals.
Reward for success
For those who are meeting and exceeding the goals set out for them, be sure to reward them for a job well done. This will help support long-term success and mitigate employee turnover that may get in the way of your meeting goals on time. Develop a strategic reward system that addresses compensation, benefits, recognition and appreciation. To do that you must first explain how the reward system works in tandem with the goals and tasks set forth. Incentive compensation plans should be used to direct employees' behavior so they will help the company achieve its objectives. Your system should reward and recognize the type of employee performance and behavior you want to reinforce. Ultimately, your reward system should result in a new-found purpose and motivation for your business and your employees. It should also be a system that the next generation of your business believes in, and plans to continue well into the future.
Systemize and standardize
Creating and documenting business processes and procedures takes time — almost as much time as determining what’s working (and what’s not) in the first place. However, systemizing processes will create efficiencies that can boost profitability and help your business grow. Take the time to understand each process, assess its effectiveness and then implement the most efficient steps to reach your end goal. In addition to saving time and money, good systems can ensure that clients and customers receive a consistent and high-quality experience.
Setting resolutions for your business, as you often do with your personal life, is an excellent habit to start. Be sure to follow-up with your business advisors to ensure your goals are achievable ones for your organization. Happy New Year!
10 Steps To Consider To Evaluate Your Succession Plan
Doug Meyer, Managing Director of Brixey & Meyer
It’s never too early to start your process for Succession Planning. Mapping out both your personal and professional goals, as a business owner, is critical to long-term success.
Many organizations don’t start thinking about succession planning until it’s time to sell. We educate businesses on the value of creating a succession plan ahead of time for many reasons. Those companies that have put a plan into place well in advance have benefited greatly in comparison to those who wait.
For us personally, when we started Brixey & Meyer we looked closely at what our succession plan would be. I look at my role today and know that I will be with the company for many years before it’s time to retire, but succession planning is still very much a key focus.
Because we feel so passionate about implementing a succession plan before transitioning our business, we’ve created 10 steps to consider, with corresponding questions to begin asking yourself as you start evaluating your succession plan.
1. PERSONAL VISION: The first step is to review your personal vision and timing. We challenge our clients with these questions as they consider growing their business. What will be my day-to-day activities at work, even if it is the same as it is today? What percent of the business will I own? Will any of my family members be involved in the business? How will I handle it if one family member is involved in the business and others are not? Will there be a qualified successor in the business, either family or non-family?
2. WHO IS THE SUCCESSOR: Will you be selling to a strategic partner, a key employee, a family member, or taking to market to an outside party? When you think of succession planning, you have to think of who could potentially buy your business and what would be attractive to them.
3. VALUE: Most companies don’t have a good feel for, or they overestimate, the true value of their company. When considering value, it’s important to think of after-tax and after-debt payoff.
4. KEY EMPLOYEES: Create a plan for what you are going to do in order to attract and retain key team members. Phantom stock agreements and stock appreciation rights are common tools we recommend in order to attract and retain talented individuals. A lot of the value of your organization is not going to be you, per se. It’s going to be those key employees you’ve put into place that will drive that value.
5. FINANICAL STATEMENTS: The next step is having sound financial statements. Anytime you are looking to transition the business, having sound financials is highly critical. Routinely evaluating those financials and ensuring that they are in good shape is an important step in this process. It is critical that your financial statements can be used as a tool to proactively manage your business.
6. INSURANCE: Coinciding with the importance of financials is that of insurance. Do you have the proper insurance and correct buy-sell agreements in place today? Although your succession plan may not be occurring for years to come, if something were to happen tomorrow, do you have everything in place for your family’s financial well-being?
7. IS MY BUSINESS TOO DEPENDENT ON ME: The next step is hard for many business owners to consider, however, it is important to make sure the business doesn’t become too dependent on you. The more your business depends on you, the less valuable your business will be when it is time to sell. It is critical to make the business less about you and more about your team.
8. CULTURE: One of the largest assets of any organization won’t be found on a balance sheet. This asset is culture. Making sure the culture fits and is aligned with your vision is important. Gaining feedback from your employees, as well as others, is important when evaluating if you are in-line with what you want your culture to be.
9. R&D AND INNOVATION: Another key component is R&D and innovation. You must continue to invest in these two pillars in order to grow and set your company up for success. If a transaction is about to occur, companies will oftentimes look at saving money rather than staying at the forefront of R&D and innovation, even though their financials/cash might take a short-term hit. You need to make the right investments to show that you are staying innovative with your business.
10. WHAT’S NEXT: Retirement sounds great when you are thirty, but at an older age we see that it’s harder to retire because the business often defines who we are with time. Business owners often struggle to separate their business from who they are, which many times can lead to depression. Things you can think about, and plan ahead for, are the charitable organizations you want to be involved with, where will you be living, and your involvement with friends and family. What will all of this look like once you retire? You don’t want to get to the point of retirement without considered these things, as your network will no longer be the business you once grew.
Why Try LDI?
Julie Highley, Senior Vice President, Horan Associates, needed a solution. When she started in a new leadership position, it also came with the need to learn new skills to help her team grow. Her solution? Enroll in the Goering Center’s Leadership Development Institute (LDI).
LDI is an 11-session, half-day workshop, running March 8 through November 8 of 2017, hosted at the Goering Center at Usquare, just off of the University of Cincinnati’s main campus. The institute is offered in partnership with Leadership Excelleration, Inc., a Cincinnati consultancy that provides comprehensive development in the areas of executive coaching and leadership development, organization effectiveness, and talent management.
In session for more than 10 years, LDI provides a powerful learning environment that is challenging, interactive and practical for leaders or emerging leaders. Here are three benefits someone can expect to gain from enrolling in LDI.
LDI features Diane Egbers and Brent Carter, two expert presenters with a combined 30 plus years of leadership experience. The presenters know how to ask the tough questions – are you aware of the habits that hinder your interaction with others? Do you have accountability and commitment with your employees? Participants are challenged and encouraged by the presenters to become more effective leaders.
Interact with Others
Interaction is a key element to the LDI experience, both with the instructor and others attending. Group workshops are combined with practical assignments to ensure workplace application after each session. Participants also often connect with other Goering Center members, from a variety of industries across the Tristate, aiming to stay in touch well after graduation.
LDI is practical. Filling the brain with leadership concepts is a wasted effort if it isn’t matched by application that can impact others and yourself. A variety of leadership skills and techniques are experienced to maximize self-awareness, learning and impact. All that to say, time spent in LDI pays off.
The format proved successful for Julie Highley.
At first, I was concerned about the time commitment. Meeting often seemed intense considering the new responsibilities I was facing. I quickly realized the Institute was the best use of my time in order to develop the skills necessary to be successful in my new role.
Julie Highley went on to complete LDI, and she discovered her management style, learned about servant leadership and today applies her skills with her team.
Hone the leadership and management skills your business needs now, by enrolling in the Leadership Development Institute. To learn more, call our friendly Membership Director, Steve Hater, at 513-702-8311.