A Rich Legacy

Our client and friend Peter Giglio, Sr, owner of Gaithersburg Garage Door has built a profitable and reputable local business over the last twenty plus years in Montgomery County, MD.  Pete and his team are focused on being the best garage door dealer, installer, and service company in the Washington DC area.

Not unlike other successful business owners we work with, Pete has strong core values that have guided him through the years in all aspects of business ownership, such as service to others, diligence, and integrity.  He regularly envisions his team with "The upward spiral"  which begins with "top-notch service to customers" and results in higher revenue and "top-notch compensation" for his team members.  Pete's core value of service to others (i.e., customers/employees) has been anchored in GGD for decades through his frequent communication of the upward spiral.

The upward spiral is just one example of how Pete has been intentional in expressing care for employees, customers, and his family through the business.  Again, like other successful business owners, he is characterized by generosity toward the community and others and has strengthened the local economy through job creation, doing business with suppliers and vendors, and producing needed products and services.  Pete also works hard to foster a peaceful and unified team environment. 

Business owners like Pete produce much good for others and the communities in which they live. The legacy being built is rich with significance due to their vision and values, and it requires years of diligence, planning, perseverance, service to others, and risk taking.  But, the building of a business is just one phase of building a legacy for a business owner.  The way in which that owner eventually leaves the business (successful or unsuccessful) is possibly the more critical phase of a business owner's legacy, as the future well-being of the business (and all the good that comes from it) much depends on how well that owner plans their exit.  Everything the owner has worked to establish through the years that affect their legacy is at stake when they exit.  No matter what exit route the owner chooses to accomplish their goals, the manner in which it is executed will have a lasting and far-reaching effect on their legacy.

What are your values-based goals for legacy pertaining to family, employees, customers, community, and others?  What have you built and facilitated through your business, and assign great value to, that you desire to see continue as part of your legacy?  Get started planning now for the event that will play a most significant role in determining your desired legacy....your eventual and inevitable exit. 

There is an old Chinese proverb that says, "The best time to plant a tree was 20 years ago.  The second best time is now."  



Your legacy and stakeholders.

Last week I attended a wonderful event hosted by an inspiring local company that has experienced steady growth and success during their twenty plus years in business.  The program included short presentations by a number of key staff, starting with the Owner and President.  A few things that stood out upon arrival, during the presentations, and throughout the evening, was the infectious enthusiasm of the team in serving their customers, the unusual long employment tenure of staff members (15-20 years seemed to be the norm), and how they seemed to love their jobs, leaders, and company.  I don't think it's a stretch to say that both employees and customers, as well as other stakeholders, would be quite saddened if that company didn't last into the future with the same level of values-based leadership and vision it now enjoys.

A stakeholder in a business is any group or individual that is impacted by the activities of that business.  The internal stakeholders would include owners, management, and staff, while external stakeholders would include customers, suppliers, strategic partners, lenders, the community and local economy.  One of the fulfilling, but sobering, aspects of owning a business that has realized prosperity and prominence in the market and community, is the many stakeholders invested in, interested in, and dependent upon, the continued future success of that business.  

It's no secret that the vision, values, diligence, skill, and responsible behavior of the owner, or owners, typically have the greatest impact on growth and the sustained success of an enterprise.   As you've grown a successful business, you've also grown the number of interested and invested stakeholders, and there is much at stake for them, and you, when you eventually exit.  

With your legacy in mind, will you design and execute an exit plan with the same level of values-based leadership, diligence, and vision?  Will your legacy be "He/She left the business as responsibly and successfully as they built it"?  Get started planning now, it will take longer than you think.


"I'm not ready to sell my business and retire..."

In my past life, when working in the financial services/wealth management industry, we helped individuals and families create financial plans for their goals such as college education or retirement.  It was very unusual to have a conversation with a client or prospective client who did not already understand that the sooner they began planning the better chance they would have in achieving their goals. They seemed to "get it" that planning, building, and saving for their goal(s) would take time and they could not simply begin planning when suddenly they were ready to send the kids to school or retire from their job.  For example, when encouraging someone to get started saving for retirement as soon as possible, we did not often hear, "I'm not ready to retire yet."

Interestingly, it is not unusual to have a business owner respond to inquiries about their exit and legacy with, "I'm not ready to sell my business", or, "I'm not ready to leave my business and retire".  The inference being, that planning isn't needed until they are actually ready to leave the business (Or, maybe we simply did a poor job describing what we do...as we do not sell businesses).  As this conversation continues, it becomes clear this owner is assuming they will be able to sell their business when they want and for the money they want, and that any planning involved really only amounts to some legal stuff regarding the sales transaction.  These are very faulty assumptions.

For most small business owners, the future business value will play a key role in their retirement planning, financial security for their family, and their desired legacy.  Like an investment portfolio of stocks, bonds, and mutual funds, there are specific things that can be done to maximize value and minimize risk but each takes time (often years) and financial resources that need to be budgeted and planned for.  But because a small privately-held business is typically not as liquid as financial assets in an investment portfolio, long-term planning can be even more imperative. Particularly, if your desire is to sell to insiders or children.

Is your business the largest asset in your investment portfolio?  Do you know what you will need your business to be worth in the future, what it's really worth now, and a plan to increase its value?  Do you have a long-term planning perspective on what might possibly be the largest and most impactful financial transaction of your life?

Don't wait until you're "ready to retire" to begin planning your business exit or you won't be ready.  Instead, have the same long-term perspective in planning your exit as you do in making contributions to your 401k/retirement plans.  


Small Business Owners: The Future Might Not Be All That Uncertain

If you are like most small business owners, you find it difficult to plan because your future has more unknowns than your non-business-owning counterparts. You might not know how much your business is worth, when you should sell, where to find the right buyer, how to fetch the best price, or even how much insurance to carry. If you have a family business or operate with a partner, you also have additional layers of both complexity and ambiguity.

When planning for the future, it is easy to become overwhelmed by all that isn’t known. When you step back and evaluate the questions marks that dot the path to your future, however, you might realize that not everything is unknown.

The value of your business is a prime example of a discoverable fact, yet if you are like 98% of the other small businesses in this country, you don’t know the answer.

With less than a half an hour of your time and innovative technology that harnesses the power of big data, you can get an accurate business valuation to illuminate your path. The valuation will give you an understanding of how much your business is worth, how it compares to others in your industry, and the levers that could drive future growth.

According to a Financial Planning Association/CNBC study, over 70% of small business owners have the majority of their wealth tied up in business assets. Knowledge of how much yours is worth brings clarity and insight into retirement and estate planning discussions, succession planning and exit strategies, and insurance protection decisions.

As Lieutenant General and former Deputy Director of the CIA, Vernon Walters, once said, “Uncertainty is the most chilling thing of all.” To reduce the amount of ambiguity you face by determining the value of your largest asset, consider obtaining a business valuation today.