This post was submitted by Capstone Project Manager Gretchen Johnson:

Experts say that the death of a business owner could mean the end of the company without a sound strategy.

Rather than a single, dramatic moment, the smooth succession of a business is a series of events. Like a relay race, a company transition should be graceful, carefully strategized and well executed to be successful. Unfortunately, the majority of business owners neglect to plan for their own succession.

More often than not, the reasons are psychological. No one likes thinking about their mortality, and entrepreneurs are no exception. Moreover, some owners so closely identify with their ventures that they can’t imagine their heirs continuing without them. Others believe they’re too busy to plan and consequently put off succession planning until tomorrow.

Tomorrow is too late. It is important to develop a business succession plan that defines what would happen to the company in a worst case scenario. It is especially important to ease the burden for family members who are left to pick up the pieces.

If a business owner dies before a plan is implemented, the business could be sold under duress at price far less than what the business might be actually worth. Or worse – the state could decide the future of the business and all of its assets if a written plan is not in place.

Owners should begin planning while they are still healthy and active. If you wait until after you’re 65, you can’t do many of the jobs associated with succession planning, such as teaching, explaining how the business operates, and passing on the spirit and vision with which it was founded.

Many sources define the time to plan between the ages of 55 and 65. And the handing over of the baton, the plan itself, should be a process, rather than a single event. Some experts recommend a three-to-five year plan while others advocate five to 10 or even 10 to 15 years. All agree, however, that the more time allotted for planning, the better the outcome.

There are a various business plans that could help determine a company’s future, including buy/sell agreements, life insurance on business partners in case of death, trusts and estate planning.

It is important to find a team of experts. The team could consist of a number of different specialists, including lawyers, accountants, investment advisors, insurance specialists and trust officers. While hiring specialists can be expensive, it would be more costly to forgo their services.

Estate and succession planning is about much more than money and finances. While it is important to be a good steward and maximize profits, maintaining the owner’s legacy and diminishing family burden can often be of greater value.

Technorati Tags: Capstone, estate planning, External Growth, Gretchen Johnson, insurance, owners, succession

This post was submitted by Capstone Senior Vice President Wes Teague:

Are we living in a period of paradox, or under a new paradigm?

Interest rates are at all-time lows (and have been for a sustained period); many corporate coffers are flush with unused (and unearning) cash; trillions of investment dollars are on the sidelines - waiting, it seems for any opportunity to jump back in, if only a good time to do so would present itself.  Yet growth is stymied, hiring is stalled, consumer purchases are flat, investment is generally non-existent.  This seems to me to be a paradox.

Unless what we are experiencing is indeed a new paradigm.  The bloated inventories, inefficient manufacturing practices and unbridled enthusiasm of the ‘90s led to a financial collapse that, while not nearly as severe as our current situation, was severe enough.  This caused a business process revolution – a new paradigm - that resulted in just-in-time delivery, and an entire new way of manufacturing and product delivery.  The current status may also be a new paradigm.  Greater savings, lower consumption, and stricter fiscal discipline by consumers and producers alike may be the new norm.

If the latter is the case, then business owners need to plan accordingly, for business growth is still required to survive.  A deeper look at what you do and how you do it, a more objective review of markets and segments, and a structured plan on how to expand is absolutely necessary if you expect to grow your  business.  A head in the sand will not work, whether we are in a paradox or a new paradigm.

Action, not apathy, is what is required today.

Technorati Tags: Acquisition Strategy, acquisitions, Capstone, External Growth, owners, wes teague

“The First Date”: Contacting Owners and Successful First Meetings
CPE Credit Awarded
Thursday, July, 29 2010; 11:00 AM ET

Hosted by David Braun, Capstone CEO

David Braun, CEO of Washington, DC- based external growth consulting firm Capstone, is hosting a webinar with Capstone Project Manager Gretchen Johnson.

Having identified the target companies you would like to consider acquiring, you are ready to make contact with the owners. The first connection is decisive. Handled correctly, it can initiate a positive relationship that may eventually lead to union. But if you botch it, that one phone call can terminate the opportunity to buy.

This webinar will show you how to approach owners of “not-for-sale” companies armed with the right information and strategy to get your foot in the door and get that critical first meeting. You will also learn about how to approach that meeting - the “first date” in what could be a successful (and lucrative) relationship for all involved.  You will be able to keep owners saying “Yes!” until you say “No!”

After completing this course, you will be able to:
•    Explain what typically motivates owners to consider the sale of their business
•    Describe effective contact strategies for getting and keeping owners on the phone
•    Detail how to use your previous market and prospect research to gain credibility with an owner
•    Outline steps to take for a successful first face-to-face visit with an owner
•    Develop a persuasive first meeting presentation to highlight the strategic fit between your company and the prospect
David and Gretchen will speak for approximately 50 minutes followed by a question-and-answer session.

Date:  Thursday, July 29, 2010
Time: 11:00 AM ET/ 10:00 AM CT/ 9:00 AM MT/ 8:00 AM PT

No Prerequisites or Advanced Preparation needed!

To register, click here:  https://www2.gotomeeting.com/register/558113314

Registration Fee: $79

IMPORTANT PAYMENT INFORMATION:  Once you register, we will send you a request for payment via PayPal (may take up to 24 hours).  Once payment is confirmed, your registration will be approved and you will receive the log-in information for the webinar.

CPE Credits – 1 CPE credit in Business Management and Organization will be given for those attending this webinar
Program Level:  Basic
Delivery Method: Group Internet-Based

Please feel free to forward this information on to anyone who might be interested in corporate growth strategies.

Refund policy: Requests for refunds must be received in writing by 1:00 PM ET Wednesday, July 28 and the money will be refunded in full within 5 business days.  After 1:00 PM ET on Wednesday, July 28 a credit will be given for a future webinar.  In the event of a cancellation, you will be given the option of of a full refund or applying your fee to a future webinar.

For questions or concerns, please contact Matt Craft at 703-854-1910 or mcraft@capstonestrategic.com

Capstone Strategic, Inc. is registered with the National Association of State Boards of Accountancy as a sponsor of continuing professional education of the National Registry of CPE Sponsors.  State boards of accountancy have final authority on the acceptance of individual courses for CPE credit.  Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 4th Ave N, Suite 700, Nashville, TN, 37219-2417. Website: www.nasba.org

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, CPE, David Braun, External Growth, first meetings, Gretchen Johnson, mergers, Mergers and Acquisitions, owner contacts, owners, webinar

Clients always want to know how  we can quickly understand the perspective of the owner of the acquisition target.  Over the past 15 years focusing on the privately-held, not-for-sale space, we have a 98% success rate getting our clients in meaningful conversations and meetings with companies that are deemed to be a strategic fit.

The reason the Capstone approach is so successful is that it is truly unique – and we continue to hone it every day.  Many clients and prospective clients have experience ‘attacking’ owners with bulk mail and cold calls - which are almost always unsuccessful. Owners on the receiving end of this barrage tell me, “I get calls from people who want to buy my company every day.  I ignore them.”  This is in addition to CEOs who tell me that generic letters go straight into the ‘round file’.

If you were to talk to owners we target, you would hear a much different response.  Usually, it sounds like “I am not sure why I returned your call but something was different about you.  It seemed sincere…you know more about us.  It makes sense.“

You need to have the right data to deem a company attractive.  You need the right information to ‘open the door’ with an owner.  You need to have a well thought-out approach and story for the owner.  Remember, they not only don’t need to sell – they don’t need to talk to you.  Consider how you can alter that dynamic.

Technorati Tags: Acquisition Strategy, acquisitions, business acquisitions, Capstone, External Growth, Growth, John Dearing, M&A, M&A News, m-and-a, mergers, Mergers and Acquisitions, owner contacts, owners