Whitewater Principals and advisors are constantly writing articles and blogs, appearing at conferences and events and involved in meetings with clients, the media and the public. Here’s a listing of where we’ve been, what we’ve been doing and what’s happening in the future.
Webinar 1 - Building Value in Internal Ownership Transitions
Webinar 2 - Five Things You Need to Know
Webinar 3 - Building Value in Family Transitions
Dates Scheduled: None
- Andrea White will be at the FPA National Conference in Anaheim, CA from October 9th through the 13th, 2009.
"Planning and Surviving a Business Transition" by Sam Hull, CFP®, RLP®
"5 Myths That Can Ruin Your Business Transition" by Sam Hull, CFP®, RLP®
"Anatomy of an Ownership Transition" by Sam Hull, CFP®, RLP®
Healthy, Wealthy and Wise: Planning for Your Encore Years by Andrea White, CPCC, MBA, MCC
GPS for Success by Stephen Covey, Andrea White, Les Brown and John Gray
People ask us interesting questions about the ownership transition process. From time to time we'll add them (and our answers) here.
Q:
My son and I have a financial planning agency that I would like to create a succession plan for. We currently operate as a sole-proprietorship in my name. Does anyone have a sample buy/sell agreement they have designed for their business that they are willing to share?
A.
I would avoid using someone else's buy/sell agreement for your succession plan with your son, Bill. This is not a "cookie cutter" experience and what you and your son design for a payout schedule and terms will be unique to your situation. Family ownership transitions generally happen over a long term, and you as seller often assume greater risk (after all–it is your son) than you would in selling to a third party. Payouts as long as 10-15 years are not uncommon and presumably you will continue to work side-by-side with your son for some of that time.
You should talk to a lawyer about changing your business formation from a sole-proprietorship to an LLC or S Corp so that the transfer of partial ownership or shares can be facilitated. Partial ownership discounting may be applicable and you may also consider use of the annual gift exemption. You will need an independent valuation of your business, and FP Transitions can help you with this. They also have many forms and sample contracts available for purchase.
Q:
I am hoping to sell my practice in about five years. Should I consider taking on a partner now to ease the transition or just plan to sell it outright on the market when the time comes?
A:
As professional financial planners, we should all have an "exit plan" for selling our business and getting the best return on our years of investment in the business. There are two big components: planning for your business and planning for your life.
A complete answer is complicated and depends on your unique circumstances; here are a few key points:
- What's Your Business Value Today? Find out what your business is worth on the open market today. Build a disaster plan in case you suddenly die or become permanently disabled. This gives you a starting point.
- Who's Your Ideal Partner? Think about what qualities, experience, relationships, skills, passion and marketing attributes would make your new partner a bottom line contributor within a short time. Be honest and think about your work and communications style and what that partner would need to mesh together with you, your clients and your team. Someone who would be fun to work with, not just someone waiting for you to move out of the corner office.
- What's Your "Buy-In" Strategy? This is a risk/return question. Do you bring the new partner into ownership slowly, sell a big piece at market value when he/she joins or sell half ownership when he/she joins and work as true partners from day 1?
- What's Your Client Trust Transfer Plan? The future stream of income from your hard won and loyal clients are what you are selling five years from now. You need a plan to make that happen smoothly and with minimal loss. This can involve everything from the name of the firm to your CRM software to building client histories to training staff.
- What's Your Life Plan? You are an incredibly talented entrepreneur who has built a valuable business. Will you really be satisfied and fulfilled playing golf 12 months a year forever? You have five years to find a meaning in new life. A coach can really help you here.
Contact us for more information. |
Find out how and when to start planning a successful transition, key steps to increase the value of your business and more.
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If you're in the middle of a transition that's gone off-track–maybe you've just had a business valuation, or you're in mediation—we can help.
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"I have found the business aspects of my transition planning inseparable from my own personal motivations, those of my clients and employees, and even those of a future buyer of my firm."
- S. G., CFP® - Owner of RIA
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