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Transitioning Within a New Market

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Transitioning Within a New Market

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Transitioning Within a New Market

  1. 1. Presenter: S. Mark Brumbelow, Senior Manager - PYA TRANSITIONING WITHIN A NEW MARKET
  2. 2. Agenda for today  Outlining Succession Planning Basics  Identifying Key Players in the Process  Setting Goals for Achievement  Exploring Tax Opportunities
  3. 3. $10,000,000,000,000?
  4. 4. $10,000,000,000,000!!
  5. 5. Succession Planning Basics  Who
  6. 6. Succession Planning Basics  Who  What
  7. 7. Succession Planning Basics  Who  What  Why
  8. 8. Succession Planning Basics  Who  What  Why  When
  9. 9. Succession Planning – Who is Impacted?  Business owners  Large business executives  Vendors and other stakeholders
  10. 10. Succession Planning – Who is Impacted?  Business owners  Large business executives  Vendors and other stakeholders  Sons and daughters
  11. 11. Succession Planning – What?  Direct involvement from executive leadership  Systemized accountability for development of future leaders  Early identification of leadership candidates  Broad internal commitment to self-improvement
  12. 12. Succession Planning – Why?  Get skills in place  Make appropriate investment decisions  Maximize company value for transition  Minimize tax burden arising out of transition
  13. 13. Succession Planning – When?  The sooner the better
  14. 14. Succession Planning – When?  The sooner the better  Continuous
  15. 15. Succession Planning – When?  The sooner the better  Continuous  Never too late
  16. 16. Effectiveness of Succession Planning 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1 Year 2 Years 5 Years 10 Years 20 Years ArbitraryNumbers Time Graphic Representation of the Options / Urgency Paradigm Options Urgency Effectiveness
  17. 17. Key Players - Who Is Involved?  Owners  Key operational leaders  Invested employees
  18. 18. Key Players - Who is Involved?  Owners  Key operational leaders  Invested employees  Human resources  Outside advisors
  19. 19. Goals for Transition  Role definition  Process owners  Network of strategic advisors  Jobs skills listing  Expanded candidate list  Development plans  Investment strategies
  20. 20. Who is doing what?  Planning future strategy  Recruiting  Training program design  Coaching and mentoring  Developing investment and structure  Setting cultural tenor and atmosphere  Designing compensation and incentive plans  Promoting future vision  Implementing non-financial initiative  Recognition and performance monitoring
  21. 21. Title Industry Example  Consolidation – TitleOne Corporation  Focus on the big picture – TitleOne  Turn the focus inward  Buyer’s bargain
  22. 22. Let’s Talk Tax
  23. 23. Transition – Tax Opportunities  Small Businesses  Transfer of ownership and responsibility to new generation of owners  Long-range cash flow considerations for retiring executives / owners, and the resulting tax impact  Protection of closely held nature of the business  Large Businesses  Incentive compensation opportunities and potential pitfalls  Non-compete agreement consideration and valuation
  24. 24. Transition – Tax Opportunities  Organizational structure could impact options  Pass-through vs. corporate structures  With enough time, you can plan around structure issues  Cash flow opportunities  Gain deferral could be available to seller  Eases cash burden on buyer  Don’t stumble on “Hot Asset” rules  Gifting and other estate planning strategies
  25. 25. Transition – Tax Challenges  Valuation of your business – your personal value vs. your business’s value  Organizational structure could impact options – especially in the short-term  Family dynamics can influence decisions – and those dynamics can change  Future owners and future operational leaders might be different people
  26. 26. Summary  Get a plan in place  Align your plan to your business  Identify successors  Develop your alliance network
  27. 27. PERSHING YOAKLEY & ASSOCIATES, P.C. 800.270.9629 | www.pyapc.com S. Mark Brumbelow, Senior Manager (800) 270-9629 mbrumbelow@pyapc.com

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