The time to start succession planning for a business is today.
That's the message shared by industry experts and representatives from the North Central Texas Small Business Development Center shared as part of the panel discussions during the Aubrey Business Resource Fair and Lunch and Learn on Sept. 17.
“Just start,” said Jeff Croswell with Edward Jones in Cross Roads about investing in retirement savings. “The most valuable asset, I think you would agree, is time. As a business owner, you think, I'll get to that next year. I'll get to that next year. … And then you look back and it's five years.”
The first panel of four was comprised of Joanna Knieberg with Raymond James in Frisco and Croswell as well as Paula McCain and Suresh Iyengar, both with the Small Business Development Center.
They fielded questions from Aubrey Municipal Development District Executive Director Christine Gossett, including about retirement planning as well as how to pass a business on to a successor.
McCain spoke about how important it is to have the financials in good order and healthy as a business owner wants to hand it over to a new owner.
Melissa Geiger of Ciera Bank added her perspective on that from the audience.
“I do commercial lending, and one thing that I see over and over again on small businesses is that they make their tax returns look as awful as possible, so they don't have to pay taxes,” she said. “And then when you come back to get a line of credit for your cash flow, I have to go by that. So kind of take a happy medium.” Iyengar also encouraged sellers to consider having someone interested in taking over the business buy in as a partial owner first to help them become acclimated to the company.
“You would still get some portion of it, and you would still get some portion of the income from the business,” he said. “You can be retained as someone who can assist in training that individual as a partner.”
Keeping a family in the business is a lot less common now, with only 6% having the company stay in the family.
Again, Croswell said, start early.
“We tell people all the time, … you have an exit strategy,” he said. “It's an involuntary or it's a voluntary exit strategy, but you're going to have an exit strategy.”
The event was a joint effort between the Aubrey MDD and the Aubrey 380 Area Chamber of Commerce.
Knieberg added that loyal employees might make a great option for handing the business off.
“From a manager or someone that's really engaged in the business and has been with you for a while, they may want to take on the opportunity to own your business,” she said. “Engaging with them is really important.”
Succession planning was not the only panel topic discussed during the lunchtime event.
Becky Ross of the town of Providence Village and Shanda Guffee of the city of Aubrey shared some of the suggestions they have for business and property owners who are looking to develop commercial properties within their towns.
When in doubt, they both said, ask questions of municipal staff first.
“Start reaching out to us when you're interested in bringing a business to Aubrey,” Guffee said.
Ross said the best time to approach the town is “the day before yesterday.”
“What you don't want to do is just come in and submit and see what happens,” Ross said. “We’ve had that happen. It's truly, truly, truly—I don't want to take your money when you're doing that. I don't want to take your large permit fee when I know for a fact that there's way more work that we have to get done before it's ready for an application.”
Realtor Carrie Millett of Patriot Property Group said she felt the event was helpful as she works with clients who want to do just that within the Aubrey and Providence Village area.
“It's important to know what you need to do, the processes, especially for those lands that you're selling for people to use for commercial or for [mixeduse development],” she said. “We do have a lot of land around here still left.”
In addition to the panel discussions, there were a few vendors at the resource fair, including Tarsha Hearns with Economic Growth Strategies.
Hearns will be helping the MDD create its business accelerator program in January.
“In a community that's growing like Aubrey, it is much needed for small businesses to know where to go to get resources and just learn about opportunities here in the area,” she said.
Following the event, Aubrey Chamber President Brian Roberson, who also serves as the Providence Village town manager, said he felt it was a success.
“I'm glad we got to do the city portion, because every city's a little bit different, and far too often people come in at the last minute and expect miracles and we are not capable of miracles usually,” he said. “So, it's nice to get the word out.”
