Month: November 2016

November 14, 2016

ProSales Article on Succession Planning

In the ProSales Article Life After LBM  Craig Webb did a terrific job of outlining succession planning challenges facing our LBM owners and leaders.

The human tendency to have deep emotional blind spots when considering your exit after a life long, heart-rending battle, building and protecting your business, is natural. Let’s approach how your competition benefits when owners refuse to develop a solid succession plan.
Recruiting Top Talent:  The stability in company direction and core values remains a key motive for top talent. If their owner is over the age of 60 without a clearly defined succession plan, we find the best 35-45 year-old talent can easily become motivated to consider another opportunity.
 Acquisition Targets: The elephant in the room is far from a secret; at least not to those who benefit. The largest acquiring companies in LBM (USLBM, BFS, BMC Stock) and the Investment Bankers brokering deals, all know it, but rarely is it discussed.  Once profitable and stable LBM companies frequently sell for 3x EBITDA, asset value, or less, due to a lack of succession planning. The scenario is unfortunate and common:  the owner falls ill or comes to their demise and the heirs have no idea what to do with the business, many times not prepared to fill the operational and leadership void. Fearing the loss of sales talent and customer base, the business is sold in a quick process. I cannot imagine a more tragic outcome for your greatest legacy. Substantial economic opportunities come from emotionally controlled planning, or lack of, and your competitors are quick to take advantage.
Please take the time to prepare and protect your Company.

 

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