More than a decade ago, Richard Jackim and Peter Christman wrote a book called The $10 Trillion Opportunity. In the book, the authors forecasted massive future sales of private businesses because of the aging of baby boomer business owners. They were right in that there were millions of aging business owners. However, they were early in their prediction of a tsunami of private company sales by those baby boomer owners. Now, more than ever, business owners should be preparing themselves, and their businesses, for the next transaction wave.
Is business ownership a binary thing? Do we either own our businesses or not? The binary notion leads business owners to think either in terms of the status quo or of an eventual sale of the business. The truth is that between the two bookends of status quo and an eventual third-party sale are many possibilities for creating shareholder liquidity and diversification and facilitating both ownership and management transition
Planning for management succession has been a recurring topic on this blog. This week, the succession news at Disney is that Robert Iger, chairman and CEO, will stay on for at least an additional year while the Company seeks a replacement. This posts uses the example of Disney to highlight the critical management succession issue for all companies, both public and private.
Recently, an attorney and financial planner called me to talk about a client who was discussing his ownership, management succession plans, and the life insurance associated with his “planning.” During our two-hour discussion, I learned about the client’s situation and was able to offer potential modifications to his current transition plan.
I was in Boston to speak at the 2016 Spring Symposia for the American Bar Association Section of Real Property, Trust and Estate Law where I had the pleasure as a non-lawyer to share a session with Edward F. Koren, JD, leader of the Private Wealth Services Group of Holland & Knight. Our session title was “Unlocking Private Company Wealth: Give me Liberty (and Plenty of Cash)”. The session was based on my book, Unlocking Private Company Wealth, and our joint experiences over many years. This post provides some of the concepts we shared in the presentation.