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Finding the Best Answer to “What’s Next” in Business Transition Planning

At some point in the natural life cycle of a closely held company, self-made entrepreneurs find themselves contemplating what's next. For many, there's a two-way magnet in play. The business has been central to their lives, and it is human nature to be drawn to what's known and proven. Yet the magnet also pulls toward possibilities: what if they wish to slow the pace? The answer to "what's next" for businesses and entrepreneurs approaching a transition is found in a unique process created by the five partners of The Founders Group. Together they lead business owners through all phases of transition where increased clarity, net cash flow, and market value expands and solidifies choices for business transition: if, when, how, how much, and to whom.
Partners Melisa Silverman, Shelley Lightfoot, Jeffrey Kates, Joseph Strazzeri, and Stephen Mancini realized that many of the conversations the business owners have already had about business transition have not addressed the design of the transition itself. The topic has been prematurely narrowed: keep or sell. "It's all about process for us. The uniqueness of this company is that it is not a law firm. It is a collaboration of five partners bringing five specialties to the table to help business owners increase the value in their company and understand their options," Lightfoot says.
By systematizing the magic originally created by the entrepreneur, the business can transition from a Wisdom-driven business which only generates cash flow to fund livelihoods, to a Value-driven business that will command the highest market value if the owners decide to sell.

Strength in Numbers

One of the strengths of The Founders Group is that the firm is one of four specialized companies in the Care to Know™ Family of Resources. Strazzeri Mancini LLP helps affluent families get to the heart of highly relevant matters and resolve messes in the areas of estate, business and tax planning, and family wealth counseling. California Estate and Elder Law LLP focuses on planning for potential disability and estate planning, probate, and trust settlement, based on the belief that legal documents should be the outcome of a great planning process that preserves family relationships as well as family assets. The Southern California Institute is a Thought Leader Community providing resources, education and advice via collaborative think tanks, events, programs, online content, and introductions. This incredible lineup of talent and experience is unmatched in California and provides an unparalleled level of resources available to the firm's clients.

Care to Know™ Planning

Too often, business owners think they only have two choices: hold on to the business and hope for the best or try to sell and hope for a good deal. The Founders Group process identifies clear and carefully planned options designed to facilitate the most efficient and profitable transition regardless of which path the owner chooses.
Their proven and highly successful process is based on their unique Care to Know™ planning model which begins by driving increase in value, and therefore expanding choices. Those who decide to keep the business find that the Enhancements that increase value likewise improve workplace dynamics and drive cash flow. For those who choose to transition the business internally, the Enhancements stabilize the company to thrive financially during and after transition. For those who decide to sell to an outside buyer, the Enhancements are impactful in commanding higher value. The Care to Know™ process apprises the client in clear terms the rewards and risks of keep vs. move on. Many of their clients have found that the firm's model converted their fear of the unknown to a sense of clarity and purpose. They find that just the relationship gives them a place and time to think clearly and to make the best decision. The collaborative approach is also a holistic one that is designed to determine the true value of the organization, its attractiveness to the marketplace, and its readiness for the transition. "One of the most common reasons business transitions derail is what we call Expectation Gaps. These are blind spots and pot holes that, once revealed, prevent a business owner from confidently executing their plan. That's why our Care to Know™ model helps business owners see the full picture of their situation early on," Mancini says.
The five partners engage their clients in a carefully crafted process of four stages.

Current StateLed by Melissa Silverman, the Current State begins with a thorough diagnostic at two layers. The first is a true valuation process conducted by credentialed valuation professionals. It offers a realistic picture of the company's value from a buyer's perspective. The second layer involves assessments in two distinct areas: attractiveness and readiness. Together, the Founders Group and the business owner learn whether the company in its current status can command its full potential value in the marketplace. By eliminating Expectation Gaps at this early stage of the journey, it helps the owner apply their investment of time, financial resources, and emotional energy to decisions and initiatives that will increase the value of the business.
Silverman, the managing partner handling this crucial initial contact, says, "The key to getting the entire process started is a professional valuation. We can't continue until we have the value of the business, a benchmark to build from. From that point we can work closely with the client to discover and implement the best transition option for his or her specific needs." The valuation, combined with the assessments, uncovers realizations, options, choices, and action plans that will lead to increased business value, cash flow, and more personal time for the owner. The Founders Group will take the owners through the results of the Assessments and Valuation reports, identifying gaps, concerns, and opportunities. Then, together, they set the parameters, goals, fees, and timelines for the next engagement, the Future Vision.

Future Vision

Family members of the business owner and the business leadership team are often essential participants in refining the direction of the Future Vision for the company. Including them can lay the foundation for buy-in from all team members who will contribute to enhancing the business value. Lightfoot is an expert in helping companies achieve owner and team alignment. The development of company vision and getting the clients in line with the team so the business can move through the Five Stages of Business is key. "This is a critical juncture for any business. They can't continue to grow if they don't have the team in place to do it," she says.
As reviewed in the Current State, a certified valuation involves much more than just EBIDTA and a multiple to derive value. For most businesses, moving though the five stages of business is the greatest factor for increasing enterprise value and stability. The evolution of who is responsible for separate core functions, decreasing risk, increasing standardization of processes, and reporting is vital. The Founders Group's Future Vision process facilitates team alignment and empowerment, refines the directions of the company, and lays the foundation to create efficient, targeted implementation plans for the business that increase the value and stability.
This stage involves three primary steps: Owner and Family Visit; Owner and Leadership Visit; and Team Tactical Planning sessions. The team creates a comprehensive and prioritized list of Enhancement Initiatives so that the business, its Founders Group team, and other collaborative advisors can set parameters, goals, fees, and timelines for the rest of the process.

Enhancement Initiatives

Jeffrey Kates, who has an extensive background as a turnaround specialist for corporations, primarily manages the Founders Group and business teams for the Enhancement Initiatives using 90-day sprints, which include multiple team meetings and owner update meetings.
Ninety-day sprints run in 30-day cycles to help the business owner progress through the process in a measurable and accountable way. In the team meetings they review data, responsibilities, and resources, set timelines and metrics, set benchmarks, progress reports and results, and incorporate education and training. Owner update meetings set team initiatives, owner initiatives, note obstacle remediation, set timelines, and report on the progress of the process.
Kates says, "As the Enhancement Initiatives are implemented, options begin to present themselves and choices are expanded. Business owners remark that their choices are now on their terms. Owners know that regardless of their decision to transition or not, their largest asset is now performing well: primed to capture any opportunity that presents itself."

The Decision

Once the business reaches the owner's targeted attractiveness, readiness, and value, the Founders Group team will facilitate "The Decision:" whether to continue to keep and grow the business process or transition it. The knowledge, experience, and significant backup resources of The Founders Group team makes the decision easy—or certainly far less challenging than originally believed. Strazzeri says, "Our clients' goals and dreams vary but often include multi-generational ownership of the business, the sale of a business, new ventures, philanthropy, travel, as well as other ways to make a difference in the "what comes next" time of life. As part of the process, we facilitate these goals with the same detailed care as we do for their business."
"Ultimately, Care to Know™ reminds the owner that they have a choice to gear up or back away. If the choice is to gear up for sale, the model helps them navigate choices around internal versus external, and in whole or in part. It helps ensure the owner sells at the prime time and for the highest value. Many owners remark that the model converted their murky fear of the unknown to a cathartic sense of clarity. They find that the relationship itself gives them a place to think," says Mancini.

The Founders Group Partners Who "Care to Know"

Melissa Silverman, Managing Partner, JD, CEPA, CVA, SBA, CMEA, is also the President of Avenue M Advisors, Inc., a national boutique business valuation and consulting services company. She is passionate about providing business transition services for closely held companies using a holistic and collaborative process that interferes the least in the business, yields business results increasing cash flow, profits and business value, and frees up time for the business owner.
Shelley Lightfoot's unique combination of experience, passion, and creativity are excellent business resources for owners seeking objective help, active collaboration, and team alignment. She is also Executive Director for the Southern California Institute (SCI).
Jeffrey Kates, MBA, CEPA, has extensive accounting, financial reporting, operations, and process improvement experience in a multitude of industries and corporate environments. Kates is also the president and owner of JIK Consulting Inc., a business advisory services firm specializing in workouts & turnarounds, interim CFO work and Mergers and Acquisitions.
Joseph J. Strazzeri, Esq. is a partner and owner in all the Care to Know™ Family of Resources. He brings an exceptional ability to shed clarity on the issues at hand and reach insights that offer illuminating resolutions. While he takes on numerous roles in his everyday work, the common denominator is how he works with others—courageously arming clients with the right questions and resources. Strazzeri developed an in-depth awareness of the business world as a general contractor, land developer, business owner, and lawyer—a rare combination.
Stephen J. Mancini, Esq. is also a partner and owner in all the Care to Know companies. As a former retail business owner and with more than 37 years of experience as an attorney, he provides a unique perspective for advising business owners, families, and their wealth advisors. Mancini's practice focuses on educating families, business owners and wealth advisors to find the answer to "what's next" for their future wealth needs. The Founders Group with its five highly educated and experienced partners (with their collaborative team), and its proven four-step process, is the go-to firm for businesses and entrepreneurs facing or approaching a business transition. They have earned that designation by providing the best answer to the overriding question relating to business transitions—"What's Next."

The Founders Group
3636 Nobel Drive, Suite 450
San Diego, CA 92122
(858) 200-1915

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