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the successor(s), involved and engaged in the process. Keep them informed about your plans. "More importantly, this is the time to be objec- tive," Marx advises. "This is not the time to get caught up in emotions. Succession planning is not just the owner looking at his own values and what he wants; it is also about communicating with the people who are going to be the succes- sors. This is not a one-way street. It is a two-way process between the owner and the person who will be running the business when the owner retires. The sooner the communication starts, the better." Step 7: Review the plan annually. Make sure you are coordinating your succession plan with your will and trust so everything is aligned. "If there is something contradictory in the docu- ments, the will overrides the succession plan," Marx says. Roberts adds, "If you want your plan- ning engine to function the way it should, you need to give it regular tune ups and make the changes that are necessary as things change in your life and in the business." "Succession planning is all about mak- ing sure that your business is as strong as possible today so it can withstand whatever the future holds," he says. "You need a plan in place that says what will happen going forward." Roberts contends, and statistics bear him out, that average companies generally don't survive. Roberts' defi nition of succession plan- ning is "the continuation of the business through the next generation. The key word is through," he says. "We are not just talking about handing the ball off. We see it as preparing the whole busi- ness to be ready for the seamless trans- fer of leadership through the next generation." While the formal succession-planning process, on paper, can be completed in as little as six to 12 months, it can take much longer to make sure your chosen successor or successors are completely ready to step into your shoes. That is why it is critical to begin the process and identify the person you want running your fl eet when you no longer want to or are no longer able to. It's a process Succession planning is not something you merely mark off your to-do list. First, the current owner determines his goals for what will happen after owner- ship is transferred. He needs to decide how much money he will draw out of the business while leaving it fi nancially sound. Secondly, he needs to focus on the best way to accomplish those goals. He needs to sit down with advisers such as accountants, attorneys, fi nancial plan- ners, and family business consultants, but also with the family. "Sometimes the answers [about what needs to be done] are easy," says Leslie Fry, partner with public-accounting fi rm Dixon Hughes Goodman LLP, but other times they are complicated by the fact that some of the owner's children may be involved in the business and some may not be. Succession planning is not the same as estate planning, so don't think you are in the clear if you have drawn up a will or trust. "Estate planning is a plan- ning mechanism to minimize federal income tax that is owed as a result of the assets you have accumulated over your lifetime," Fry explains. "While succession planning dovetails with estate planning, succession planning actually is planning for the orderly transition of your business." Third, you need to choose the right people to run the business. There may be a clear leader in waiting or it may be a leadership team to guide the business transition into the next phase once the owner decides to retire or in the event something happens to him. Family matters When family members are involved, suc- cession planning can include an estate-planning component as the busi- ness owner tries to make an equitable distribution of his assets to children who are involved in the business, as well as those who are not. Fry says the fl eet owner needs to develop a short-term bridge plan to share with his management team. Rawls says this can be implemented if the busi- ness owner becomes unable to run the business but the successor is not quite ready to take over the reins. Rawls says there is no such thing as having too many committed, talented, hard-working family members in the business, but urges caution about family members who bring a sense of entitle- ment. "This creates all sorts of prob- lems," he says. "A strong successful business owner who would not even think about bending the rules for a non-family manager will bend them all day long when it comes to bringing their kids into the business." He says it is imperative that any family members — especially potential successors — be treated the same way as other employ- ees and not have their statures elevated beyond what they have earned and are capable of doing. "A parent can give a child a job, a title and a paycheck, but what they cannot give them is respect, and without respect they do not have a chance of being successful in the long run because nobody is going to stick with them through the tough times." Failure to have a succession plan in place can interrupt your normal business operations as well. "People may quit the business if they are worried that in the future it will close and they won't have jobs," Marx says. "Suppliers may leave, too, if they feel the current owner is not paying attention to what will happen to the business in the future. "Another real possibility is that the owner himself may not get the value from his own blood, sweat and tears that he spent over all those decades building the business. Frankly, from the day the business is designed, it should have a succession plan." 2 0 1 5 V 3 | BULLDOG | 1 1 Exit strategy continued from page 9 6 process. Keep them informed about your plans. 6 process. Keep them informed about your plans. "More importantly, this is the time to be objec- 6 "More importantly, this is the time to be objec- tive," Marx advises. "This is not the time to get 6 tive," Marx advises. "This is not the time to get caught up in emotions. Succession planning is 6 caught up in emotions. Succession planning is not just the owner looking at his own values and 6 not just the owner looking at his own values and what he wants; it is also about communicating 6 what he wants; it is also about communicating with the people who are going to be the succes- 6 with the people who are going to be the succes- 7 you are coordinating your succession plan with 7 you are coordinating your succession plan with your will and trust so everything is aligned. "If 7 your will and trust so everything is aligned. "If there is something contradictory in the docu- 7 there is something contradictory in the docu- ments, the will overrides the succession plan," 7 ments, the will overrides the succession plan," Marx says. Roberts adds, "If you want your plan- 7 Marx says. Roberts adds, "If you want your plan- ning engine to function the way it should, you 7 ning engine to function the way it should, you need to give it regular tune ups and make the 7 need to give it regular tune ups and make the