The Next Generation: A Great Son Doesn't Always Make a Great Boss

Very few things in this world are as satisfying as starting a business from scratch and making it grow with hard work and dedication. There are many large companies that started out in garages, small apartments or even the corner of a busy city street. In any case, all business owners that started from the bottom will eventually face the inevitable concern of figuring out who they will pass the torch to. Company presidents who face this dilemma are usually drawn to the idea of transitioning their ownership position to one of their children. After all, these are the people they often feel that they can trust the most. They grew up with the values you taught them and they are decent human beings and great sons and daughters, but maybe they don’t really have what it takes to run the business that took you so much effort over so many years.

There is a very common problem with a strong business that is passed to the next generation of the family. It’s been said that the first generation works extremely hard and barely enjoys the perks. The second generation works just hard enough to keep things running, but they enjoy all the benefits of their successful business. The third generation has everything they ever wanted, but they didn’t put in the same effort for it.

This risk can be minimized if you expect them to learn and earn what they are going to get. Make them work hard, do not give them all the advantages and perks without making them get a taste of hard work and 12 hour days of stress and tension. If you want things to run properly when you give away the power of your company to your sons or daughters, make sure they appreciate what you are giving to them.

Selling Your Business? Knowledge is Power: SBA and Business Acquisition Loans

**Special Guest Blogger**

By Dave Caster, SBA Lending Specialist, Bank of Oak Ridge

dcaster@bankofoakridge.com

(336) 286-1919

As an SBA lender for the past 24 years, I’ve worked a good number of business acquisition deals.  My clients have found that the SBA 7(a) business acquisition product is perhaps one of the best financing tools available to buyers purchasing small businesses. 

Why? Up to 90% of the acquisition can be financed for deals up to $5 million, with the SBA allowing some or all of the equity injection to be in the form of a seller-held note . . . and no worries about the collateral shortfall.  They also offer long amortizations, as well as the ability to roll all deal costs into the loan.

The end result?  A buyer can successfully acquire a business, spending little or no money.

Some buyers know this.  Many sellers do not.

My goal is to educate sellers on the lending options available that enable a successful transaction.  

So for the seller who is ready to hand the business down to a key employee or family member, the SBA product is a great option because typically, without SBA support, this is not possible.  While the heir apparent may possess all the skills necessary to lead the firm, they may not have the cash or borrowing power to get the deal done.

As a banker, these deals are the most satisfying. The business remains intact, in town, and with an enduring legacy firmly in place.   The business wins, the new owner wins, the community wins, and the seller walks away with cash and peace of mind.

For the seller seeking an internal buyer, this allows the heir apparent to be hand-picked, groomed, and put in place without having to resort to taking back a sizeable seller-held note. 

For the seller seeking an outside buyer, the ability to empower the buyer with financing options can be a key component to completing the deal. 

The next step?  If an SBA lending option sounds like it might be a fit for your particular situation, give me a call or send me an email.  I’d be happy to provide the knowledge necessary to give you the power.

For more information about your SBA loan options, please visit www.BankofOakRidge.com/SBA.

The "Boomer"ang Effect

Let’s talk about the elephant in the room:

Despite what you may think, most baby boomers who transition out of a C-Suite role after age 60 are not “retiring”…  Sure, it’s easy to label it that. The indicators are all there -- they are dangerously close to traditional retirement age. They are exiting their current role.  They have achieved a high level of success so they have clearly ‘earned the right’ to kick back and enjoy life… It’s easy to conclude they must be ‘retiring’! 

But they’re not!

They are what I call “Boomer”angs.  They exit one role and start another. Their new role may be in a different line of work, at a different pace, or under different circumstances, but it is clearly work!

These boomers know they have a lot left in them to give.  And they vehemently reject the word ‘retirement’ to describe their transition -- and I don’t blame them. They want to continue contributing in significant ways – growing an organization, adding value, and for many, doing paid work.

When word starts spreading that retirement is on someone’s horizon, doors start to close and people begin to think of them differently… or worse… not at all.

We may hesitate to recommend them for a position because we secretly suspect they don’t really want to work anymore. We may encourage them to travel and rib them about spending time on the golf course, refusing to take their job search seriously. We may simply forget about them because they are no longer the CEO of xyz, Inc. or the owner of abc company. This has the effect of unnecessarily diminishing their strong market place brand, harming their credibility and limiting the opportunities they will seriously be considered for.  

We don’t mean to do it, of course! But it happens. The value these C-Suite professionals bring is worth more than we can afford to throw away. The wisdom and experience they bring is sorely needed to boost our economy and develop the next generation of tail-end boomers, Gen X’ers and Millennial leaders. Let’s make it easy for C-Suite early boomers to seek and find that next role, the one that they can embrace, that plays to their strengths, ignites their passion and contributes in meaningful ways. 

Take action – help the C-Suite boomer’ang’s you know and love transition well! And if you’re the C-Suite boomerang, and you’re not ready to retire, share this post and let’s get a real conversation going.

Let’s not just be aware of this trend. Let’s change it.

abby@leadershiplegacygroup.com