BEI Tools and Resources Archives - Business Enterprise Institute

Best BEI Podcasts of 2023

Posted on December 15, 2023 by admin

Last week’s blog highlighted five of the most impactful BEI webinars and sessions of 2023. This week, we’re bringing you our five most engaging and insightful podcasts of the year! In this series of BEI’s top 2023 podcasts, we showcase expert insights on Exit and Succession Planning, alongside cutting-edge tax strategies for family businesses.

Each episode offers valuable perspectives and practical advice, making them essential listening for professionals in the planning world. We invite you to explore these discussions to enhance your understanding and strategy in Exit Planning, and encourage you to connect with us for further growth in 2024!

Exiting on Your Terms: The Thoughtful Approach to Family Business Continuity Planning

In this episode, John Brown and expert guest Nick Niemann, an Exit and Succession planning attorney & Partner at McGrath North Mullin & Kratz, delve into the world of Exit Planning and the unique approach Nick takes to ensure the continuity and success of family-run businesses. Nick shared valuable insights on treating colleagues like family and the impact of a thought-out Exit Plan on everyone involved. This episode is a must-listen for anyone interested in Exit Planning, especially those in family-run businesses!

Listen now: Exiting on Your Terms: The Thoughtful Approach to Family Business Continuity Planning

Deferring Taxes with Section 453: A Key Element of Exit Planning

Dan Finn, founder of Finn Financial Group, and John Brown discussed how best to reduce the tax impact of selling a client’s business to a third party. John and Dan Finn explored the impacts of Section 453 and what you can do as an advisor to address the concerns of business owners when it’s time to sell their business.

Listen Now: Deferring Taxes with Section 453: A Key Element of Exit Planning

Presence is Paramount in Exit Planning

In this insightful episode, John Brown and Robert dePalo Jr., JD, CExP, Director of Business Planning with National Financial Network, opened with a candid conversation about attracting and engaging Exit Planning clients. Robert shared his experience in Exit Planning and how both planning processes and advisor tactics have evolved to meet the needs of the modern-day business owner.

Robert detailed which BEI tools have best served his practice and emphasizes the importance of staying relevant and present in the eyes of your clients and prospects. He shared one of his most effective social media strategies and how his partnership with BEI has improved his LinkedIn impressions, email open rates, and overall perception as a thought-leader in the Exit Planning space.

Listen now: Presence is Paramount in Exit Planning

Plan Your Exit: Expert Advice for Transitioning Out of Business Ownership

This thrilling episode featured estate planning lawyer, Alex Weatherly. John and Alex spoke about how he transitioned to being an Exit Planner, helping business owners transition their businesses to other family members or sell it. He discussed the importance of planning for business succession, as well as how estate planning is just one part of the overall planning process. Weatherly also shared some of his own experiences with poorly planned business successions and the importance of considering family relationships in the planning process.

Tune in here: Plan Your Exit: Expert Advice for Transitioning Out of Business Ownership

Maximizing Profits Through Tax Planning: Insider Plan Spreadsheet

In this podcast episode of “Why We Plan,” John Brown interviewed Keven Prather, a long-term member of BEI, who discussed a tool he uses to effectively communicate with his business owner clients. The BEI insider plan spreadsheet lays out the net after-tax effects of an insider transaction, allowing for scenario analysis and tax planning. They also discussed the concept of selling for the lowest defensible value and the importance of building a key employee team. Lastly, they briefly closed on the topic of Exit Planning and the idea of bringing up an internal team instead of selling.

Keven Prather is a registered representative of and offers securities and investment advisory services through MML Investors Service, LLC. TransitioNext Advisors® is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. OSJ: 2012 W. 25th St., Suite 900, Cleveland, Ohio 44113. 216-621-5680. CRN202603-4039457

Watch the Recording: Maximizing Profits through Tax Planning: Insider Plan Spreadsheet

The Bottom Line

BEI’s “Why We Plan” podcasts of 2023 speak to our diverse network of professionals that have shaped the industry year over year. From thought provoking discussions to applicable advice given by experts in the field, you can check out our entire catalog of podcasts and resources here!

We’d welcome the opportunity to speak with you more about these concepts and how you can use them to get more strategic meetings on the calendar with clients in 2024.

https://meetings.hubspot.com/lfannin/get-to-know-bei

Business Continuity: Protecting Client Value

Posted on September 22, 2023 by admin

In our contemporary business world, unpredictability seems to be the only predictable element. Business owners, from fledgling startups to well-established enterprises, find themselves navigating an ever-changing landscape, teeming with unforeseen challenges and obstacles.

This fluid environment makes having a robust business continuity plan not only invaluable, but essential. These instructions are a blueprint for safeguarding the hard-earned legacy of business owners. So, why is business continuity planning a non-negotiable facet of a successful relationship with your client? Let’s explore why you should engage your clients in conversations about business continuity and how it relates to their financial security.

Beyond Immediate Concerns: The Long-Term Vision of Business Continuity

In a recent survey conducted by BEI, we found that only 26% of business owners have created a business continuity plan as a step towards their Exit Plans. However, 61% responded that they have determined what their financial needs are at the time of exit. This presents an opportunity for advisors to engage clients in a discussion of their long-term financial goals. Further, advisors can share how to protect those goals should something unforeseen happen to them in the short-term that would jeopardize their financial security and business stability.

It is here that the role of business continuity planning becomes paramount. It provides a solid foundation to begin the planning process, regardless of when the owner is planning to exit, or even if they have engaged you to do a full Exit Plan. This planning goes beyond immediate concerns, encouraging business owners to view the bigger picture, focusing on both the preservation and growth of their businesses and the protection of their wealth.

Safeguarding Legacy and Fostering Peace of Mind

At the core of business continuity planning lies the goal of protecting the business should an event happen in the lives of business owners that prevents them from continuing to work in the business. It not only offers a safeguard for the businesses they have painstakingly built, but also promises peace of mind, knowing that their loved ones and employees will have a pathway to navigate through uncertain times.

Business continuity plans and instructions encompass critical components such as initial contacts to be made, actionable steps to be taken in the aftermath of the owner’s sudden departure, and outlines for management responsibilities. This roadmap aims to prevent a vacuum of leadership and direction, providing clear guidelines to steer the business through potentially turbulent phases.

Bridging the Gap to a Secure Post-Business Life

We mentioned previously that a majority of owners have determined their post-exit financial needs. Interestingly, business owners often harbor a misconception regarding their financial outlook. There seems to be a common belief that expenditures will reduce once they step away from their business roles. However, the reality often paints a different picture, with many finding that life post-business demands financial planning akin to, if not exceeding, their current spending patterns. When this misconception is combined with the other assumption that business owners make regarding the value of their businesses, it’s a recipe for financial disaster.

Once owners have a plan started based on realistic financial expectations and business value, and know how they are going to work with advisors to bridge that gap, it’s imperative to start asking the “what if” questions.

What if 3 years into a 10 year plan, the owner suddenly becomes ill and can no longer work in the business? What if the business has two owners, and one dies unexpectedly and the buy-sell agreement doesn’t address this type of departure? Is there a plan in place to keep the business running profitably so that the owner’s family is taken care of financially when there is a sudden loss of income? As you can see, it becomes imperative for business owners, even those who are reluctant to exit in the near future, to combine business continuity planning with a realistic and forward-thinking financial strategy.

Creating a Resilient Business: The Role of Advisors in Business Continuity Planning

Advisors play an important role in helping business owners develop a plan that is both flexible and resilient, able to withstand the challenges that might lie ahead.

Creating business continuity instructions is a critical step in this journey. In an ideal scenario, an Exit Plan unfolds seamlessly, transitioning ownership smoothly at the planned juncture. However, real-life is rarely that straightforward, with unexpected eventualities like death, incapacitation, or disputes throwing a wrench in the works.

Business advisors equipped to help business owners foresee these potential hiccups and formulate strategies to mitigate them effectively can show immediate value to their clients, leading to more comprehensive planning engagements. These strategies encompass a set of instructions that serve as a guide for family members and other stakeholders, addressing both personal and business challenges that may arise due to the sudden absence of the business owner.

The Bottom Line: Envisioning a Protected Future

Irrespective of business transitions timelines, business continuity planning emerges as a tool of empowerment, offering stability and foresight amidst uncertainties. It’s a clarion call to business owners to rise above the immediate hurdles and carve out pathways that ensure the protection of their legacies, fostering a future where their businesses not only survive but thrive in the hands of those who follow in their footsteps. Are you prepared to assist owners with this level of planning? Schedule some time with us to view how BEI supports advisors with content and tools to attract, engage, and plan with owners on the topic of business continuity.

ESOPs In Action and Establishing a Legacy

Posted on May 12, 2023 by admin

What is an ESOP?

Employee Stock Ownership Programs (ESOPs) have become increasingly popular among companies as a way to engage and retain employees while also providing a unique ownership structure.

This exit path allows employees to own shares in the company they work for, which can result in significant benefits for both the business and the community it serves.

In this blog post, we’ll explore two examples of ESOPs in action within the Colorado community.

Benefits of an ESOP:

The main benefit of an ESOP is that it incentivizes employees to work harder, stay with the company longer, and feel more invested in its success.

ESOP guru and BEI Member, Kelly Finnell had the opportunity to work with Denver Restaurant Group, Edible Beats, to create an ESOP for its employees.

Kelly and his team at Executive Financial Services worked to develop an ESOP for Edible Beats Founder, Justin Cucci, and his hard-working team of 325+ employees. Here’s what Kelly and his team were able to accomplish with Edible Beats through the creation and implementation of an ESOP:

Employee Benefits: Employees earn shares based on their tenure and salaries. More responsibilities come with a higher salary, and employees in turn get more shares within the company.

At Edible Beats, every employee regardless of tenure was eligible to be included in the plan. According to Founder, Justin Cucci, new employees must wait a year from the start of employment in order to get vested, and will earn 25% of their shares each year after.

Improved Retention: ESOPs are a powerful tool for employee retention. When employees feel like they have a stake in the success of the company, they are more likely to stay with the business for the long-term. This reduces turnover costs and ensures that the company retains valuable talent.
Increased Motivation: ESOPs can be a powerful motivator for employees. When employees own a piece of the company, they are more likely to take ownership of their work and feel more invested in the success of the business.

Cucci spoke about how life changing it can be to own shares in a company. Equity provided from shares can assist in purchasing a home or a business down the road.

“The only thing the shares can’t do is be transferred or sold to another person. Shareholders who want to disinvest must sell their shares back to Edible Beats”, wrote Linnea Covington.

Heightened Productivity: Companies with ESOPs often see an increase in productivity. This is because employees feel more motivated to work harder, are more invested in the company’s success, and have a greater sense of ownership.

“For Cucci, creating the ESOP means he doesn’t have to sell off Edible Beats in pieces, or to an owner who may dismantle the business that he built so carefully. Eventually, the idea is to have the Edible Beats restaurants completely employee owned.”

For more details on Edible Beats and their recent ESOP strategy, check out this article from Restaurant Hospitality written by Linnea Covington: Denver Restaurant Group Offers Stock To Employees.

Building a Sense of Community:

So, how does an ESOP positively impact the community? Let’s take a look at a long time Colorado favorite, Beau Jo’s Pizza.

Chip Bair, the owner and founder of Beau Jo’s pizza restaurant in Idaho Springs, announced at the 50th anniversary celebration that he’ll be selling the business to his employees through an Employee Stock Ownership Plan (ESOP).

As a Colorado institution that’s served approximately three million pies over the years, Beau Jo’s move to an ESOP will ensure that the business will remain in the hands of employees who have helped make it a success over the years.

This move demonstrates Bair’s commitment to the community and his employees who have helped make Beau Jo’s a beloved institution over the past half-century. Here’s how:

Community Involvement: ESOPs provide local employment opportunities to community members and support the local economy. Idaho Springs, CO, has faced an economic downturn as mines across town shut down over the years. Luckily, the newly employee owned pizza joint also calls Idaho Springs home and has been able to provide jobs for many that lost their jobs of the years, establishing Beau Jo’s as a pillar in the community.

In an article published by Jason Blevins for The Colorado Sun on Employee Ownership and Creating a Legacy, Jason wrote about an Idaho Springs Local, “Alex Dunn worked at Beau Jo’s during college and in the summers when she was a teacher. She started working full-time at the Idaho Springs restaurant 17 years ago and now she is the general manager.”

Leaving a Lasting Legacy

In addition to the benefits mentioned above, ESOPs are also a valuable tool for building a lasting legacy. ESOPs can help to paint the picture about:

Long-Term Perspective: When employees own a piece of the company, they tend to take a longer-term perspective. This means that decisions are made with the future in mind, rather than just short-term gains.
Succession Planning: ESOPs can be an effective way to facilitate succession planning. By gradually selling shares to employees, business owners can ensure that the company stays in the hands of those who are committed to its success.
Increased Value: Companies with ESOPs tend to be more valuable, as they have a committed and motivated workforce. This can result in higher profits, which can be reinvested in the business, the community, or other initiatives that support the company’s long-term success.

The Bottom Line

An ESOP can provide significant benefits for both the business and the community it serves. They can improve employee retention, motivation, and productivity, while also stimulating economic growth and community involvement. Additionally, ESOPs are a valuable tool for building a lasting legacy.

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