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Set up a succession plan for your closely held business

February 21, 2012 By

submitted by Martin H. Abo, CPA/ABV/CVA/CFF, Abo and Company, LLC

If you are the owner of a closely held business, how wise it is to prepare a long-term succession plan to ensure an easy transition to the next generation of owners. A plan can even prevent the company’s destruction if one owner retires, becomes disabled, is terminated or dies. If ownership changes or the owners split because of a disagreement without having a succession plan in place, the viability of the business can be seriously damaged.

Here are some steps to follow in setting up a succession plan for your business:

  • Obtain and periodically update a business valuation. This sets the company’s worth so that the owners know their stock’s value in a transfer. The value estimate can vary over time and should be updated regularly to account for changes in company size and profitability.
  • Buy life insurance to cover the owners. Base the amount of coverage on key owners on the value of their stock, providing for proceeds to fund share purchases. Creating a partnership among the owners to receive the life insurance benefits if any of them dies can help owners avoid taxes on the proceeds. In addition, deceased shareholders’ estates will be paid in cash, thus eliminating their need to rely on the continued prosperity of the corporation. Another advantage of using life insurance is that the enterprise’s investment in the cash value of an ordinary life policy is a business asset. Also talk to the insurance professional about “disability buy-out” insurance.
  • Set up buy-sell agreements. Owners of the company need to agree to buy back shares of any owner who dies or leaves, which will enable them to prevent outsiders from buying the company’s stock.
  • Involve the next generation. Bring family members, employees or other future owners into the succession process early by selling them shares and preparing them for management.

Taking these steps will go a long way toward ensuring that a closely held business passes smoothly from generation to generation, and that the business remains stable and viable for years to come.

Filed Under: Business Notebook, Morrisville Times Columnists Tagged With: ,

Integrity vs. apathy

November 30, 2011 By

submitted by Dr. Susan Burger, Riverside Chiropractic & Vitality Center

Recently a woman in my office said, “Dr. B., I don’t know what I’m going to do about the election next year. Democrat, Republican…I don’t trust any of them anymore!” Later that same day a man said, “You know, this is the first time in my life that I am not voting in the local elections – it just doesn’t seem to matter.”

It is sad when the hopelessness of apathy sets in. We don’t know who to vote for that can “fix” things. Do we just give up?

It is time that we take responsibility and not look to anyone else to solve our problems, including those in government. Systems are crashing around us, built on a house of cards, a lack of integrity. There is a need for connection, a sense of requited humanity that has been lost.

We can start in our own families, schools, and communities. Things could get worse before they get better, and a positive result of that can be that we rise to the occasion and find ways to help each other more, work together to meet the challenges that come our way.

In the show “Survivor,” I was annoyed when the participants talked about friendships and teammates…but when it really came down to it, would turn on anyone to win in the end. Is this really winning?

In reality, it is the team that works together, looks out for each other and creates a synergy and system of support that wins. Rather than win-lose being the norm, we can recreate the win-wins.

It is time for US to STAND UP! In our own lives and do what is right, from the heart. We are all in this together.

Filed Under: Morrisville Times Columnists, Yardley Voice Columnists Tagged With: , , , ,

Avoid auto headaches, have your car checked before winter arrives

November 30, 2011 By

submitted by John’s Service Center, Morrisville

As rain, ice and snow approaches, it is a good idea to make sure that your vehicle tires are in good shape.

Check tire pressure and that they are correctly inflated. Most vehicles have a label by the door jamb with the correct tire pressure information. Also, check tread wear. If the tread is too low or bald the vehicle will not have good traction, especially during slippery conditions. Check tires for dry-rotting – the wall of the tire will show tiny cracks. If this is the case, and/or tire tread is too low, it’s time to get new tires.

Have your local repair shop check the cooling system. Your coolant should have the proper strength. Check for coolant leaks and proper thermostat operation.

Defroster and heater operation should also be checked. Be sure to have good wiper blades, and that the windshield washer is working and filled with a good washer fluid/deicer. 

Door locks should be treated with a deicer fluid as well.  Windshields with cracks or chips are particularly susceptible to cold weather. Windshields with cracks and chips should be replaced or repaired. 

Check your headlights, turn signals and marker lights. Clear headlights of debris and salt periodically. It’s also a good idea to have undercarriage of the car washed off from the corrosive effect of salt. It is recommended that you use a car wash facility, or if you have a high-pressure nozzle attached to a water hose you can probably do the job as well.

Ask your repair shop to check the start and charging system of your vehicle. Battery and terminals should be checked and serviced to insure good contact. While you are there, have your mechanic check belts, hoses and tires. Cost is relatively inexpensive if any of these items need to be replaced.

You will save yourself a lot of headaches, especially if you avoid getting stranded on the road. As always, be safe by observing the speed limit and never leave children unattended in a vehicle.

Filed Under: Morrisville Times Columnists, The Family Health Edition Tagged With: , , ,