Handing firm to a new boss
Dear Karen: What are the key elements of a succession plan?
Answer: Start with a brief overview of your business, including a description of your industry, your products or services, history and long-term objectives, said Brent Lipschultz, a principal with accounting firm Eisner’s personal wealth advisory practice.
Follow that with a page or two on the business and personal goals of the current owner and his or her written retirement plan. “The retirement plan should provide an income stream for the owner without depleting his or her retirement accounts,” Lipschultz said.
Next, include a training plan for your successor. Identify the successor, if one has been chosen, as well as the team that will manage the firm.
Finally, you’ll want an ownership transfer plan, a family governance plan (for a family-owned business) and a business plan. The transfer plan outlines how the owner will divest his or her shares or interest in the business, and the family governance section clarifies roles and responsibilities for a board of directors.
The business plan should provide a blueprint for the company’s future. Lipschultz advises that entrepreneurs seek professional help to create detailed, useful succession plans.
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Playing hardball
with a supplier
Dear Karen: My family has owned a gaming store for nearly 20 years, and it has grown to the point that we would like to purchase directly from a particular manufacturer. We have communicated via certified letters, e-mails and telephone about becoming a direct account, but they won’t oblige us. How can we get their attention?
Answer: Manufacturers tend to be loyal to their good distributors, and this one may be reluctant to take your account away from the distributor and potentially damage their relationship, said Bill Warren, a marketing and product development consultant.
If your store is big enough to earn you volume pricing from this supplier, flex some muscle. “Personally visit not only this supplier but also other suppliers. Shop your business around,” Warren said. “Only when you are ready to walk away from your original supplier will you get what you want.”
But be careful what you wish for. “Working directly with a manufacturer will require you to place much larger orders, carry more inventory and perhaps accept less attractive payment terms,” Warren said. “There may also be service, warranty and returns considerations.”
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Lots to do before
going retail
Dear Karen: I’m currently making candy in a commercial kitchen and selling it at farmers’ markets. How can I distribute through retailers?
Answer: Farmers’ market to retail outlet represents a huge leap in manufacturing, expense and education. You’ll need to learn about food production, safety and product labeling, hiring a bulk co-packer, distribution channels, intellectual property protection, pricing, marketing and more.
Much of this information is available online or in books, but the best way to learn quickly would be to attend an industry trade show. The National Assn. for the Specialty Food Trade is sponsoring a “fancy food show” next week in Chicago and one this summer in New York. For details, go to www.nasft.com and click on “fancy food show.”
Another option is to hire a food consultant to help you navigate through your product launch.
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