Omaha Bar Association s Young Lawyers Division Seminar Succession Planning for Business-Owning Clients

Transcription

1 2015 NSBA Annual Meeting Omaha Bar Association s Young Lawyers Division Seminar Succession Planning for Business-Owning Clients Nicholas Niemann October 9, 2015 Embassy Suites, La Vista

2 Succession Planning For Business-Owning Clients The Essential Actions For Business Owners Entering Their Fourth Quarter Nick Niemann, JD, CEPA What Do You and I see Every Day... Bob s Story Failed to understand all Business Models are perishable. Carla s Story Failed to control family ownership. Patty s Story Failed to protect family wealth. Randy s Story Failed to develop key successors. (Actual names not used) 1

3 THE MOST IMPORTANT SUCCESSION PLANNING REALITY [ ] Succession and Exit Planning Are Only Of Value If The Business Endures! We ve All Seen Outrageous Successes Stunning Falls We ve All Seen 2

4 Stunning Falls Outrageous Successes What Separates Them? Most Companies = Under- Achievers Arie de Geus Author, The Living Company More Than of businesses today will not survive the 33%next 10 years (Cisco CEO John Chambers June 7, 2015) 3

5 Either we disrupt or we get disrupted. (Cisco CEO John Chambers speaking to 25,000 business attendees at June 7, 2015 conference) Business Model Turbulence Today A Real Need To Know Your Business Model Your Client s Business Model Applies To All Companies Small Middle Market Large 4

6 Business Professional Consumer Product Manufacturing Industrial Manufacturing Business Services Food and Beverage Construction Health Care Agribusiness Farm & Ranch Real Estate Product Development Energy Applies To All Sectors Distribution Financial Services Retail Human Resources Franchise Security Consumer Services Education Personal Services Leasing Technology Licensing Transportation CPAs Financial Planners Insurance Advisors Business Consultants Investment Advisors Environmental Specialists Engineers Attorneys Architects Physicians IT Professionals Real Estate Developers No One Is Immune netflixed netflixed netflixed netflixing 5

7 netflixed netflixing and netflixing netflixing netflixing netflixing 6

8 netflixing What Is The Business Model Myth? How Do We Fix It? Success Lies In The Simplicity. 7

9 Common Reasons Given For Success or Failure Products Services Customer Demand The Economy Finance Mgmnt Operations Mgmnt Pricing Cash Flow Leadership Successor Employee Turnover Personnel Competition Insurgents Attitudes Customer Relationships Technology Financing Taxes Costs Control Customer Turnover Channels Government Behaviors Personnel Disputes Family Issues Company Salability Owner Disputes Accidents Litigation Suppliers Fraud Etc But What Are The Root Causes The Success/Failure Reasons Products/Services Cash Flow Customer Demand Personnel The Economy Competition Pricing Insurgents Technology Customer Channels Relationships Finance Mgmnt Operations Mgmnt Leadership Successor Employee Turnover Attitudes Costs Control Customer Turnover Behaviors Family Issues Company Salability Owner Disputes Etc Personnel Disputes Accidents Litigation Fraud Etc Financing Taxes Government Suppliers Resources Etc } } } This Applies For All 4 Quarters The Root Causes Business Model Leadership Culture 8

10 + = = Business Model Command Dynamic Leadership Core Root Force Culture Lasting Success Effective Succession and Exit Plan = WHAT WHY HOW WHAT What Business Are We Really In? WHY Why Does Our Business Model (Still) Work? HOW How Does Our Business Model Create, Deliver and Capture Unique Value? 9

11 So - What the Heck Is A... Business Model? = Chester Carlson 10

12 Too Expensive!! Shelve it. 11

13 Larry Page and Sergey Brin Too Cheap!! - - Free! 12

14 The Movie Entertainment Business Blockbuster 1 (Stores) Blockbuster 2 (w/ Online) Blockbuster 3 (by Dish) Netflix 1 (Mail) Redbox Pay Per View Netflix 2 (+ Stream) Amazon Instant Video Cable TV Netflix 3 (Original Content) itunes HuLu Plus Movie Theatre?? Netflix Blockbuster

15 Direct Channel Monopolistic Subscription Servitization Of Products 14

16 Quarter Horse Arabian Thoroughbred Morgan Shetland Pony Business Model = 15

17 Business Model HOW an organization Creates, Delivers and Captures Unique Value 16

18 We Had 470 Co-Authors From 45 Countries We completed Handbook in 2009 A global bestseller 1,000,000 sold 30 languages 17

19 Business Model Business Model Resources Offer Customer Profit 4 Epicenters 18

20 Key Partners Key Activities Key Resources Value Propositions Customer Relationships Customer Channels Customer Segments Cost Structure Revenue Streams Source: Business Model Generation.com The Business Model Canvas Source: Business Model Generation.com The Business Model Canvas Who Outside Of My Company Helps Me Do It? How Do I Make It? What Do I Use to Make It? What Do I Sell? How Do I Keep My Customers? How Do I Reach and Deliver to My Customers? Who Buys From Me? How Do I Control My Costs? How Do My Customers Pay Me? Source: Business Model Generation.com 19

21 BACK STAGE FRONT STAGE Customer Doesn t Care About This Customer Sees This Source: Business Model Generation.com Some of the Practitioners of the Business Model Canvas Methodology Source: Business Model Generation.com = Being Used By Over 5,000,000 Business & Professional Leaders Around The World 20

22 Your Unique Competitive Advantage Is Usually 1 Of The 9 Intel FedEx Nespresso ZAPPOS LEGO Apple Dell Wal-Mart Google Source: Business Model Generation HOW TAKEAWAY #1 9 Block Your Client s Business Model Example Google - Multi-Sided Platform Business Model Free Search Web Surfers Targeted Ads Advertisers Free Keyword Auctions 21

23 WHAT What Business Are We Really In? WHY Why Does Our Business Model (Still) Work? HOW How Does Our Business Model Create, Deliver and Capture Unique Value? WHY vs WHY 22

24 WHY WHY WHY 23

25 WHY TAKEAWAY #2 Know Your Model s Unique Decision Factors OBE? Keep Asking Why? Why? Why? Why? Why? Why? Why? Why? Why? 24

26 WHAT What Business Are We Really In? WHY Why Does Our Business Model (Still) Work? HOW How Does Our Business Model Create, Deliver and Capture Unique Value? WHAT WHAT 25

27 WHAT WHAT WHAT TAKEAWAY #3 Think Customer Benefits Not Business Sector 26

28 WHAT Business Sector Life Insurance Business Cereal Business Online Supermarket Business Customer Benefit Lifestyle Continuity Business Health & Wellness Business (Kelloggs) Making Online Shopping Fun Business (EasyPeasy) WHAT Business Sector Hairdresser Business Office Equipment Sales Business Customer Benefit Image Enhancement Business Workflow Improvement Business WHAT WHY HOW 27

29 Commercial HVAC Manufacturer Business Model Analysis Type: B2B Sector: HVAC Business Model Command WHAT Making Our Contractors Competitive HOW Modify HVAC In Shop WHY Saves Contractors (the Customer) time and money on site Competitive Focus THIS THIS NOT THIS AirBnB Business Model Analysis Type: C2C Sector: Travel Business Model Command WHAT Hospitality (Not Sharing ) HOW WHY Owners Earn $ From Underutilized Space Which Travelers Want Enable Travelers To Rent Unique Places From Local Hosts Competitive Focus Add Offline Experiences Tagline = Belong Anywhere WHAT Sheltering People HOW WHY We Know Real Estate We buy, sell, invest in and manage real estate for ourself and others NP Dodge Business Model Analysis Type: B2C Sector: Real B2B Estate Business Model Command Competitive Focus Add Employee Relocation Service 28

30 PATH OF HIGH PERFORMERS (Example: NetFlix) Does Your Client Have A Great Business Model Profit Strategy? vs Add to this the... Impact of the Fourth Quarter Effect 29

31 Changing Dynamics In Fourth Quarter Owner Spouse Children Customers Successors Key Employees Banker Partners Community Business Model Opportunities Estate Planning Investments Financial Planning Health Disability or Death Concerns LT Care Concerns Legacy Fourth Quarter Reality Growth 1 st Qtr 2 nd Qtr 3 rd Qtr Owner Recognizes 4 th Qtr Dynamics Owner Denies 4 th Qtr Dynamics Time Business Owner s Time In Action First Half Second Half 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter 2 Minute Warning Main Aspect Common Owner Goals Start Build Grow Be Successful / Make A Profit Grow or Decline Stay Successful / Make A Difference Exit Common Owner Mindset Common Key Employee Mindset Bring It On! Let s Get On This Ride! Well Let s Think About That When Do I Get To Drive? Succession & Exit Planning 30

32 What Results Does The Fourth Quarter Business Owner Want? Fourth Quarter Results Wanted GROW PROTECT CONTROL RETIRE 31

33 Essential Actions GROW 1. Business Model Command 2. Dynamic Leadership Core 3. Knowing What 4. Knowing How 5. Knowing Why 6. Root Force Culture Essential Actions PROTECT 1. Business Protection 2. Ownership Protection 3. Wealth Protection 4. Investment Protection 5. Cash Flow Protection 6. Generation Protection Essential Actions CONTROL 1. Financial Continuity 2. Business Continuity 3. Buy-Sell-Hold 4. Active Children 5. Estate Tax Reduction 6. Wealth Ownership 32

34 Essential Actions RETIRE 1. Business Value 2. Key Successors 3. Company Readiness 4. Tax Strategy 5. Inside Buyer 6. Outside Buyer Fourth Quarter Results Wanted Fourth Quarter Results Achieved By PROFIT PLAN MY FOURTH QUARTER GAME PLAN TM PROTECTION PLAN ESTATE PLAN SUCCESSION PLAN 33

35 WHAT TAKEAWAY #4 Anticipate The Fourth Quarter Effect Companies We ve Used This For Small Middle Market Large Sectors We ve Used This For Business Consumer Product Distribution Manufacturing Financial Services Industrial Manufacturing Retail Business Services Human Resources Food and Beverage Franchise Construction Security Health Care Consumer Services Agribusiness Education Farm & Ranch Personal Services Real Estate Leasing Product Development Technology Licensing Energy Transportation Professional CPAs Financial Planners Insurance Advisors Business Consultants Investment Advisors Environmental Specialists Engineers Attorneys Architects Physicians IT Professionals Real Estate Developers 34

36 Please Leave Me Your Business Card Nick Niemann Business Succession & Exit Planning Attorney McGrath North Law Firm Omaha, Nebraska

37 or Call: Succession Planning For Business-Owning Clients Presentation Notice This presentation should not be considered as legal, business or financial advice. This presentation is designed to provide information about the subject matter covered. It is provided with the understanding that while the speaker/author is a practicing business owner advisor, neither he nor his firm has been engaged by the attendee/reader to render legal or other professional services (unless a specific engagement agreement has been executed). If legal, business or financial advice or other expert assistance is required by the attendee/reader, the services of a competent professional should be sought. Copyright Nicholas K. Niemann. All Rights Reserved. 36