Commentary -Green Industry Conference
The Green Industry Conference in Louisville, Kentucky is one of my favorite events of the year, partly for practical reasons and partly because that I find it is actually a fun event.
On the practical side, there is no better networking venue than this one. Lawn and landscape professionals and business owners from all over the country all in one place, eager to share ideas and benefit from the experiences of their peers in other parts of the country. The Breakfast with Champions event, which I have had the honor to participate in for the last three years is the single best networking event I have ever participated in. There are around sixty different tables, each with a designated topic to discuss. There is a facilitator, but the magic of the Breakfast with Champions is the interaction between the participants.
There are many other opportunities for networking, too.
And then there is the trade show, technically the Green Industry Expo. One of the largest trade shows in the United States, this is quite an event. It is an opportunity to see what’s new with all of the vendors that lawn and landscape businesses may need (and some they not need, too) There are many interesting and entertaining things outside in the demonstrationarea (remote control mowers, demonstrations of the latest in chain saws, etc.). In addition, there are many training events as well.
If at all possible, this is an event not to be missed. We will be there throughout the event from Wednesday evening unto Saturday morning. We will be at the Breakfast with Champions all three days. We are staying at the Downtown Louisville Marriott. If you would like to schedule a time to meet, just give me a call at 901-351-1510 or email me at [email protected].
Ron Edmonds
Exit Planning: Understanding Your Objectives
This is the second in a series of articles on exit planning in the green industry. This article will focus on what we consider to be the first step in effective exit planning, which is understanding your objectives.
Understanding your own objectives may not be quite as simple as it may appear.
I thought it might be interesting to share some of the objectives people have told me that they have in exit planning:
* What I really want to do is pass the business on to my children, but I don’t know how to make that work.
* My employees helped build this business and I think the best for everyone would be for the employees to be able to own the business.
* The most import thing to me is that I have a secure retirement. I have t have enough money to be secure in retirement.
* I have a new job lined up and I am ready to slow down a bit, but I need to make plans to sell my business to make that happen.
* My partners and I don’t really have the same objectives. One of them wants to retire, but the rest of us want to stay with the business for many years.
* I always planned to pass the business on to my son, but he doesn’t seem interested at all now.
* I had always intended to pass the business on to my child, but they haven’t really demonstrated any real business aptitude, so I don’t think that’s going to work.
* I think I am close to having taken the business as far as I can on my own. If the business is to survive and thrive, it will need more capital than I can contribute or it will need talent and leadership that I can not provide.
* I don’t really want to sell my business and my best guess is I still won’t want to five years down the road, but I would like to know that I can have options if things change.
As varied as those comments, they are really just the simple versions of objectives that business owners. Many business owners have some combination of many of those concerns. The situation is often complicated by the fact that business partners who work together perfectly well in operating the business may have very different needs and objectives when it comes to exit planning, with different time frames, family issues, lifestyle issues, etc. to contend with.
Once you have wrestled with the idea of what your objectives are, it is time to quantify them.
For example, if retirement is your objective, what level of assets or monthly cash flow will be required to achieve your retirement objectives, considering not just the business, but your other investments, including retirement funds and social security, if applicable?
A similar analysis is necessary if you are contemplating a career shift or acquiring (or starting) a different business.
Usually, it is necessary to involve your accountant and your financial advisor in this process to make sure you really understand your situation and what your options may be. A facilitator can often help you understand your own objectives better. He or she can also coordinate the input of your various advisors and help synthesize the various factors as you build yur plan to achieve your objectives.
An important thing to remember is that objectives change over time. You really need to revisit your objectives regularly to make sure the plans you have in place still match your objectives.
Next month, we will address the next step in exit planning, understanding the value and marketability of your business, or put another way, understanding what you have to work with.
Recent Transactions
NEI Holdings announced that its New England Irrigation unit, based in, Milford, Mass. acquired the accounts of Underground Concepts, Hopedale Mass. North East Irrigation, Bayville, N.J. acquired the residential service accounts of LandTech Enterprises, Warrington Pa.
VHB Engineering, Surveying, and Landscape Architecture, P.C. (VHB) has acquired Saccardi & Schiff, Inc., a White Plains, New York planning and development firm.
Small Business Jobs Act Expands SBA Lending (finally)
In late September, President Obama signed the Small Business Job Act. In addition to other provisions, the Act had significant implications for the Small Business Administration Loan program.
First, the Act extended the provisions first included in the Recovery Act last year increasing the guaranty to 90% and waiving most fees to borrowers through the end of 2010. This is a long-awaited action that had been held up politically. There were two other positive actions affecting SBA lending – the maximum size of an 7(a) loan, often used for acquisitions, was permanently increased from $2 million to $5 million. In addition, the Act increased the size of business considered “small” for purposes of qualifying for SBA loans. The alternative size standards are now less than $15 million in net worth or less than $2 million average earnings. This is also a permanent change.