GMB Ep #76: Business Succession Planning With M&A Expert Michael Vann

The succession of a business or exiting from a business is an important and intimate event most business owners will have to plan at some point in their journey. We dedicated today’s episode to exploring what business owners should think about when planning their succession or exit, even if they don’t anticipate it anytime soon. Today, our guest is Michael Vann, an author, certified scale architect, and the president of The Vann Group LLC. Throughout the episode, we explore the process of succession, how relationships and emotions come into play, how taxation applies to succession, and what Michael has learned through his extensive experience in the mergers and acquisitions market.

 

 

Show Notes

[01:35] Michael’s Background – We start the conversation with a brief review of Michael’s background, from being in the corporate environment to working on his father’s business. 

[04:51] Acquisitions – While working in the corporate world, Michael gained lots of experience in acquisitions. He shares some of the important strategic planning points of acquisitions for buyers. 

[10:21] Family Business – Once Michael left his corporate job, he started working on his father’s business. Michael talks about the work he did there and how the business evolved under his influence. 

[15:44] Business Transitions – Michael’s family business has been going through a phase of transition from his father to Michael and his siblings. Michael dives deep into the process of transitioning and the emotional aspect of it. 

[18:02] Process of Successions – The typical flow of business succession, deciding between different options for succession, and managing financial matters. 

[23:38] Relationship Dynamics – Business transitions may get a bit more complex when they’re between family members or people with close personal relationships. Michael talks about some of the obstacles that may come up in these sorts of transitions and how to overcome them. 

[27:12] COVID and the Industry – How the pandemic impacted Michael’s line of business and the new trends that emerged from it.  

[33:19] Taxation – Michael shares his take on how the newly proposed tax reforms may affect buyers and sellers in the mergers and acquisitions arena. 

[39:11] Michael’s Vision for Future – Michael dives into some of the possible avenues for his business to expand and grow, and some of the interesting concepts covered in the book Michael coauthored with his father. 

 

Resources

Michael’s Book: amazon.com/Buying-Out-Boss-Successors-Succession

Website: vann-group.com
LinkedIn: linkedin.com/in/michaelvann 

 

It's Never too Early to Start a Succession Plan

It’s Never Too Early to Start a Succession Plan

So here’s a topic that all business owners have thought about but few have taken action on: succession planning.  I was reading a study by Wilmington Trust the other day that polled 200 different owners of privately held businesses.  Personally, I’ve yet to meet a business owner who doesn’t agree that succession planning is important to their company and stakeholders.  Yet in this study, 58% of the businesses polled don’t have a succession plan in place!

Successions impact…everything: your family, your legacy, your finances, your employees, your partners, your customers, your stakeholders, and anyone else who touches your company.  My guess is that you want all these pieces intact throughout your transition and after you leave.  Yet most business owners don’t tackle the issue until a) it’s high time to exit, or b) they’re forced to for a reason out of their control.

Why?  Many people start to realize that the emotions involved are heavy and deep.  Your business is probably something that you’ve poured your heart and soul into for a long period of time.  You may have taken significant financial risks that have impacted your family along the way.  The decision making required in succession planning brings up a lot of emotion, and many business owners prefer to kick the can down the road rather than deal with them.

Problem is, there are many situations out of our control that could force a succession at an inconvenient time.  Health problems, car accidents, or even changes in the economy or your industry could easily force your hand.  Rather than rush into a transition unprepared (and in a potential fire sale), you’ll reach a far more desirable outcome when your succession is planned for.  What happens if you get into an accident and come out with diminished mental capacity?  What happens if you have a heart attack & die tomorrow?  What’s the game plan?  Who will step in, and how will your family, employees, customers, and other stakeholders be taken care of?  These are the questions a good succession plan answers.  They’re also the questions that must be made while you’re in a calm, stable, and clear state of mind.

 

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