1. business and industrial

SUCCESSION PLANNING
IN THE TRUCKING INDUSTRY
MAY 6, 2015
Physical
Social
JEFF NOBLE, CMC
THE BDO SUCCESSCARE PROGRAM™
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Intellectual
MANY BUSINESS OWNERS STILL FAIL TO PLAN AHEAD
A recent BDO survey showed that:
• The majority of business owners are focused on actions and
strategies to secure long-term success
• But only 25% have a succession plan to address the day when
they are no longer able or willing to run the operation
• What is more long-term than the transition of the business?
• Succession planning remains stuck at the bottom of most
people’s agendas
© The BDO SuccessCare Program™
2
OVERVIEW
• The good news and the bad news
• Common roadblocks to be aware of in planning for succession
• Critical success factors for protecting your tangible and
intangible assets
• Key strategies for integrating your long-term business
strategy with a proven approach to preparing for your
inevitable exit and sale of your business
© The BDO SuccessCare Program™
3
THE GOOD NEWS
• Over 90% of North-American businesses are family-controlled
• In Canada these businesses:
 Generate almost 60% of the GDP
 Employ about 60% of the workforce
 Create 70% of all new jobs
• 80% feel the business has a definite impact on their family
identity
• 84% would love to pass the baton to a family member
© The BDO SuccessCare Program™
4
THE BAD NEWS
• Demographics show that 75% of Canadian businesses are
expected to change leadership in 1 to 2 car leases:
 That’s 350,000 businesses
 Approximately $1 trillion will change hands
• Less than half have a succession plan and/or an identified
successor
• Historically, 70% of families are unsuccessful in transitioning
wealth:
 60% of failures are the result of a breakdown in trust and
communication
 25% are attributed to inadequate preparation of heirs
© The BDO SuccessCare Program™
5
Source: PWC, Laird Tyne, CFIB, MassMutual, Williams & Preisser
WHY SME’S DO NOT HAVE SUCCESSION PLANS
Too early to plan
for succession
60%
No time to
deal with issue
28%
Can’t find adequate
advice/tools to start
17%
Too complex
12%
Other
11%
Don’t want to
think about leaving
Conflict with
family/employees
8%
3%
52%
29%
21%
16%
12%
13%
5%
Source: CFIB
2005 vs 2012
© The BDO SuccessCare Program™
6
EVERY BUSINESS WILL BE SOLD EVENTUALLY
•
•
•
•
Death / disability
Disagreement / divorce
Decline in profitability
Franchisor
Inside the
family / business
• Lifestyle changes
Involuntarily
Voluntarily
Outside the
family / business
It can take up to ten years to create the choice!
© The BDO SuccessCare Program™
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THE BUSINESS HIGHWAY
Warning: possible
bridge out ahead
© The BDO SuccessCare Program™
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Exit Ramp
TYPICAL ROADBLOCKS ~ DIFFERING OBJECTIVES
Well-being of
family, employees,
partners
A cohesive ownership
group with a common
vision
A profitable and
successful business
© The BDO SuccessCare Program™
9
Image adapted from the 3-circle model by Tagiuri & Davis
TYPICAL ROADBLOCKS ~ DIFFERING OBJECTIVES
Well-being
of
Emotional Centre
family, employees,
• Empathy
partners
• Support
AWealth
cohesive
ownership
Centre
group
with a common
• Stewardship
vision
• Fair and Equitable
Wealth Engine
A profitable and
• Opportunity
successful
business
• Competition
© The BDO SuccessCare Program™
10
Image adapted from the 3-circle model by Tagiuri & Davis
MOST FEEL SUCCESSION IS NEGATIVE
• Succession implies retirement ~ and retirement means
to take something out of use
• So succession means giving up control
• Some feel succession can lead to a loss of wealth
• Some fear succession will cause family conflict
© The BDO SuccessCare Program™
11
THREE FEARS
Fear of losing wealth
Fear of losing control
Fear of creating conflict
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12
CRITICAL SUCCESS FACTOR~ MORE THAN FINANCIAL
Traditionally
Transition of Ownership and Management
In Reality…
About Transfer of Authority and Relationships
Ultimately…
About Transfer of Knowledge and Wisdom
If you focus on the traditional,
you will omit the key components
of a successful transition
© The BDO SuccessCare Program™
13
CRITICAL SUCCESS FACTORS
Principles and Values
Individual/Family Reputation
Personal Relationships
Family Traditions
Philanthropy
Environment
Shares
Cash
Property
Equipment
Vehicles
Education
Competencies
Product Knowledge
Experience and Wisdom
Business Relationships
Business Reputation
© The BDO SuccessCare Program™
14
CRITICAL SUCCESS FACTORS
Principles and Values
Enable the legacy
Individual/Family
Reputation
through
support of
Personal
Relationships
Family
Traditions
individuals,
family unit
Philanthropy
and greater community
Environment
Shares for the financial
Provide
Cash
independence and
Property
lifestyle of retiring
Equipment
and future generations
Vehicles
Education
Enhance
the success of
Competencies
the individual
and the
Product
Knowledge
Experience
and Wisdom
profitability
of
Business
theRelationships
operation
Business Reputation
© The BDO SuccessCare Program™
15
COMPARISON BY CATEGORY
© The BDO SuccessCare Program™
16
CRITICAL SUCCESS FACTOR ~ CREATE A “WE” FOCUS
POSITIVE OUTCOME MODEL
YESTERDAY
96% FAIL TO FIND A
POSITIVE OUTCOME
TODAY
Principles/
Values
History/
Relationships
Moods/
Personalities
© The BDO SuccessCare Program™
17
TOMORROW
Structures
Common
Interest
Facts
70% FIND A
POSITIVE OUTCOME
THE BDO SUCCESSCARE PROGRAMTM
Building A Bigger Future
Ownership
CONTACT JEFF:
905 272 6247
Family/
Personal
Business
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