11
FROM THE FOUNDER
The future will be here before you know it, so there is no time to delay your ownership transition planning efforts. Ownership transition needs to start now
O wnership transition is one of those things that many owners of AEC firms really don’t think much about. They hope it will all somehow work out when the time comes, but don’t really understand it. They know it’s important, but they think of their exit as something that will take place a long time into the future, so any decisions about ownership transition get pushed out.
Mark Zweig
That’s a problem. Whatever your personal plans are, you need to start now. Why is that, you may ask? Here are my thoughts: 1. Anything could happen. You may find yourself sick, or worse, die unexpectedly. You want your family to be taken care of and you want your business to survive. So it’s best to plan now. Do you have a buy/sell or shareholder agreement or an LLC operating agreement that specifies how your ownership interest is valued? If not, get that fixed now. Do you have life insurance with the company being the beneficiary so they can buy your stock back? If not, get it. You don’t want to deal with these issues when it’s too late. 2. Ownership transition could take a long time. It will always be easier and less painful for all involved if you start sooner. Who says it needs to be a switch that is flipped so it all happens at
once? Maybe paying for your ownership stake over 20 or 30 years will be less painful than doing it at once or over five years. So if you start the process and sell a little bit of it every year between now and the time you plan to retire that could create less strain on everyone. It will also supply you with a certain amount of income you wouldn’t otherwise get which could allow you to take less out of the company at tax time to meet your tax obligations, and that will help the company have a stronger balance sheet. There are many reasons to start the process early! 3. Ownership is a critical tool to motivate and retain your top talent. It is – and always has been as long as I have been working in this industry – a career objective of many people. Why hold them off? If you can sell these people some ownership
See MARK ZWEIG, page 12
THE ZWEIG LETTER OCTOBER 31, 2022, ISSUE 1463
Made with FlippingBook Annual report