Boating Industry

March 2016

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Page 21 of 43 22 | Boating Industry | March 2016 i n our industry, it is easy to focus on the here and now: What do we need to do to have a successful season? How do we increase profits today? What products will drive more sales? However, it is to the detriment of our future if we cannot look further than beyond what is directly in front of us. This is especially true for succession planning. Having an exit strategy that will carry your business into the future and build upon its current success is imperative, and it's time to start thinking about it now – even if you've only recently taken ownership. According to the 2014 Family Business Survey from PwC, only 16 percent of family firms have a discussed and documented suc- cession plan in place. When considering how long it takes for a business to plan and effectively execute an ownership transition, this statistic is startling. David Spader of Spader Business Management said companies that start at least 10 years out in the planning process have about an 85 percent likelihood of still being in business 15 years after the ownership transfer date. "The odds are pretty good that if you start far enough out that you can make a successful transition. That makes sense in a lot of ways be- cause the more time we have, the more options we have," said Spader. "[Business owners] don't really want to start thinking about it that early when in reality those organizations do have an exponentially higher likelihood of success. Those that take just a few years [to plan], the success rates go down sometimes even into the 10 to 20 percent likelihood that it will still be around 15 to 20 years later." With that advance planning comes the need for open avenues of communication and trust, particularly for family-owned businesses. While the financial, tax and legal ramifications are important to con- sider, they are not often what will impact a transition. "That is the primary reason why most family business transitions – 70 percent-plus – fail, because of the breakdown of trust and commu- nications through that process," said Don Bielen, director of business advisory services at The Rainier Group, Inc. "I strongly encourage an individual to use a business transition succession planning expert that works as a facilitator with the attorneys, the accountants, the fam- ily counselors, the insurance individuals, to facilitate and manage this process, because it is truly a process that requires expertise, skills and experience to effectively work with family businesses and its owners." (Find a list of experts on p. 27.) Identify goals Whether a transition happens in one transaction or over a period of time ultimately depends on the goals of the seller and the buyer, the BY BRIANNA LIESTMAN

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