AmericanHort is proud to present this timely Mastery Series on Succession and Exit Planning consisting of three classes hosted by a panel of experts ranging from CEPAs (Certified Exit Planning Advisors), accounting, legal, financial planning, and organizational development professionals who will help you form a succession plan for your business. There’s one indisputable fact—100% of owners eventually will exit their business. In the horticulture industry, there are many stories of successful transitions to new owners and to family members in the horticultural industry.
However, in these times there are even more stories of unnecessary closures and liquidations, family disagreements, disasters, and owners passing away without a business continuity plan in place or even a will. The critical difference is that planning leads to successful outcomes.
This Mastery Series occur over three classes that will cover topics such as:
The opportunity will be given to peer share and discuss options with other owners who are planning a third-party sale or family succession. We will also take an in-depth look at your personal, business, and financial readiness for the next step of your journey.
The time to start is now — whether you are in your 30s and find yourself as a new owner of a growing operation, or you are in your 60s with no one to hand the reins over to. Collectively, our experts have never had a client complain that they spent too much time planning for their succession or exit.
Session 1: What is Your Why? Succession & Exit Planning as a Business Strategy
Succession and Exit Planning is simply good business strategy, and it takes a team of advisors to turn your vision into reality. Over 75% of business owners profoundly regret selling their businesses within one year. That doesn’t have to be you. What is your destiny and passion outside of the company? Your business may be attractive, but is it ready to transition without you at the helm? You may be ready to retire, but does that mean you are prepared? In this session, we look at your personal, business, and financial readiness and the questions you should be asking and answering yourself. This is the critical starting point. We will also provide an overview and the key goals and objectives for the workshop.
Session 2: The Basics of Business Valuation
How do you begin to put a price on a lifetime of blood, sweat, and tears? It is a challenging exercise, and it is much more than financial reports and balance sheets. Here we will review the basics of business valuation and the tangibles and intangibles that ultimately determine business value. We will look at ways to recast your financials and actions you can take to improve value and profitability and develop a business strategy based on facts. We will review the critical wealth, profit, and value gaps to know when as you prepare your business for a third-party sale or family succession.
Session 3: Personal Financial Planning for Horticultural Business Owners
For most owners, 80% of their wealth and net worth is locked in their business. The quarterback of the personal financial readiness team is the Financial Planner, and this is who will help you reach your retirement goals. There are four components every business owner must deal with— cash flow, risk management, investment, and distribution of money for life. In this section, you will hear from expert financial planners on the importance of turning your non-liquid asset (business) into a liquid event to be managed to produce a repeatable, consistent, and rising income stream over one’s remaining lifetime.
Session 1: Business Continuity Planning
Where are the passwords? Disaster planning for fire, flood, weather events, and infrastructure failure is just common sense in most organizations. Many such plans lack actionable information for when the owner isn’t available to lead, manage, and coordinate everyone else’s effort. An owner’s death or disability frequently leads to the failure of a business, with repercussions for family, employees, and customers. We will review critical information needed to keep the company operating in the short term, as well as longer-term continuity planning.
Session 2: Business Value Acceleration & Optimization
This is when owners transition from working in their business to working on their business, which can be very rewarding. In this session, we will learn the five stages of value maturity and the four “capitals” that account for 80% of a business’s value— human, customer, structural, and social capital. As you address each stage of value maturity and focus on the four capitals, your personal and business wealth both grow. This is where we fill the wealth, value, and profit gaps that will lead to a successful family succession or business sale.
Session 3: An Owner’s Journey
You will hear from your peers during a special interview with two growers taking different succession and exit planning paths. One is a major tree grower in the South who is planning a family succession to his son, and we will hear about their challenges and the progress they have made along the way. The second is a grower in Washington state, with no family succession, that has gone through the exit planning and value acceleration process and is now exploring his future options.
Session 1: Your Exit Options
In this session, we will review your exit options, both internal (intergenerational transfer, management buy-out, sale to partners, and an Employee Stock Ownership Program, or ESOP) and external (sale to a third party, recapitalization, and liquidation). We will explore the pros and cons of each and try to remove some of the mystery surrounding ESOPs, third-party sales to Private Equity (PE), and the M&A process. We will learn about the types of buyers and the advantages, disadvantages, and differences of using a business broker or an investment banker.
Session 2: Family Succession
Family firms outperform non-family businesses over the long term. However, family issues and challenges can have deep and profound effects on the family business. Family firms are a system that requires you to think about the family, the company, and the individuals involved. A family succession can be rewarding and continue the owner’s legacy, but it can also be a disaster filled with emotional pitfalls and struggles. In this session, we will review what we have seen work in family transitions, present a paradigm shift from thinking about “the family business” to thinking about “family enterprise,” and provide strategies you can use to get everyone on the same page.
Session 3: Estate, Philanthropic & Tax Planning
You have made the decision to exit and will soon be harvesting the value from your lifetime of work. How do you determine and ensure your desires are carried out when it comes to your wealth? In this session, we will learn from an Estate Planning Attorney about the various tools available, asset protection, charitable giving vehicles, the importance of buy/sell agreements, and ways to minimize taxation.
Session 3.1: The Wrap-Up
The question at the “Decide” stage is to keep or sell? If the answer is to sell, we work to maximize after-tax transaction proceeds and outcomes. If the answer is to keep, we work on those priorities to accelerate business value over a period of time. We will have a quick review and recap of the workshop to assist in your decision-making and provide you with those steps you can start taking today and, in the future, to make sure the transition and transaction of your life are not left up to chance.