Succeeding at Succession
Mike Vann didn’t have the exact figures, but he said round numbers would certainly get his points across. And he was right.
There are roughly 7.5 million businesses in this country owned by an individual or individuals over the age of 55, said Vann, a principal, with his father, Kevin, of the Springfield-based business-consulting firm the Vann Group. And maybe 25% of them have “some semblance” of a succession plan in place.
He chose that phrase carefully, and then qualified it by saying that many of those plans would not be considered up to date or realistic.
“There’s something there, but it’s outdated and it’s no longer relevant, but they can can check the box and say they did something,” Mike explained, adding quickly that business owners need to do more than something — they need something well thought out and realistic.
This simple truth explains why BusinessWest and the Vanns are partnering to make succession planning the topic of the second installment of the magazine’s ongoing lecture series of issues confronting all those in business.
In fact, there will be two presentations of the same program in different locations for the convenience of those who might — and should — attend. The first offering of “Heading for the Exit: Business Succession Realties and Process,” will be staged Wednesday, Sept. 30 at the Student Prince/the Fort in Springfield, while the second will be conducted Wednesday, Oct. 7 at the Smith College Conference Center. In both cases, registration will be at 7:15 a.m., with the program running from 7:30 to 9 a.m.
Kevin Vann said the title of the lecture was chosen carefully because effective succession requires careful, thoughtful planning, this is indeed a process, and there are many realities — many of which business owners don’t want to acknowledge.
At the top of that list are the fact that they are getting older and need to address succession, because this issue will not go away or take care of itself.
The format for the lectures will be a general presentation followed by what the Vanns hope will be an intense round of Q&A. That’s because everyone should have questions about this subject, they said, but too often they don’t get asked.
“The presentation highlights market trends as to what’s going on with this subject and what’s driving the succession-planning needs and challenges,” Mike said. “And then, it will feature a walk-through of what the succession-planning process looks like and all the different moving pieces. It covers everything from understanding the value of your business to the importance of having your financial plan in place, to the need to have a life plan in place for after your business is transitioned.”
Kevin added that the program will provide some needed information, but also drive home some key points, such as the fact that, when it comes to succession planning, many business owners make assumptions, which can and often do lead to big problems down the road.
“Business owners assume way too much as far as who may be part of their succession plan,” he explained. “They assume the children might or that a key employee might, or a strategic competitor might.”
Other assumptions or mistakes include everything from trying to be fair with all of one’s children to the presumed value of the company, to not properly preparing the business for sale, he went on, adding that the keys in all aspects of this process are to be realistic and avoid guesswork.
Kate Campiti, BusinessWest’s associate publisher, said the magazine launched its lecture series this past spring as part of ongoing and multi-faceted efforts to keep readers informed and up-to-date on matters of concern to all business owners.
The series’ first lecture, “Technology Has the Power to Change Healthcare,” featured a panel of experts talking about a subject that touches many businesses and every individual, said Campiti, adding that the second installment in the series can be equally impactful.
“Succession is an issue that every business must address,” she said. “It’s a difficult issue, there are many factors involved, and people need to plan. This lecture is designed to get these points across and to assist business owners with the work of putting a plan together, which is indeed a process.”
Admission to the lectures is free; however, registration is required by visiting www.businesswest.com. The deadline for registering for the Sept. 30 lecture is Sept. 22, while the deadline for the Oct. 7 presentation is Sept. 29. For more information, call (413) 781-8600.
— George O’Brien