There are two books available from Amazon, Now What? and Implementing the Buy-Sell Agreement. Click the image to be taken to the Amazon site.
This book, written by Rick Riebesell, a business consultant with Business Transition Consulting LLC, is for owners of businesses in the second phase of the business cycle.
There are three phases to the business cycle. The first phase is startup, where the business comes into existence by establishing legal form, business structure, and market generating revenue. Second is profitability, usually with growth, where the business structure is refined to respond to the market and establish profitability with owners serving as managers. The third phase is transition, where ownership and management increasingly are discrete, and ownership changes.
In the second phase, as the primary goal changes from making a profit to getting the maximum value from the business, what will distinguish the successful business from the unsuccessful? It will be the quality of decision-making. For a business to succeed and endure over a period of years, yielding maximum value to its owners, the quality of decision-making must become part of the business structure.
Owners of profitable businesses many times are the founders of the business and the managers of the business. Profitability has occurred by responding to a proven market need through a business structure. The owner often is the manager of the business and is usually seeking to answer the questions surrounding sustaining profitability and the establishment of middle management (management by non-owners) in the business. At this phase there are many challenges. In a competitive market place, how can the market position be sustained and increased? How can the business structure be managed to reduce the cost of providing the product or service to increase profitability? How can the decision-making process of the business be improved? What contingency planning is in place? What is the value of the business? How can capital be acquired? Can the risk be managed? Why does profitability not necessarily result in liquidity?
These are difficult and complicated questions. As with most complex questions, the answers are not apparent and many times not accessible.
This is an owner’s manual for those owning a profitable business describing how to embed a quality and enriching decision-making process in the business and receive maximum value from their business.
Implementing the Buy-Sell Agreement
If the owner of a business dies or becomes permanently disabled, what will happen to the value of the business? How is the value of the business interest transferred to the heirs of the business owner?
Implementing the Buy-Sell Agreement, written by Rick Riebesell, a business consultant with Business Transition Consulting LLC, deals with the concepts that enable the business owner to begin the process of implementing a buy-sell agreement.
While implementing a buy-sell agreement is not a do-it-yourself project, it does require leadership and effort. Learning what is in this book and becoming interested in finding out more will help the business owner begin the process, know how to expend the effort, and help determine when professional help is required.
At its most rewarding, owning a business involves the creation of a process for making good decisions. This process, by necessity, will mean that a group of people involved with the business as employees, stakeholders, and owners are a part of the process. Nothing about this involves a majority owner losing control of a business.
Group decision-making is required for the creation of a succession plan. The buy-sell agreement is drafted from the succession plan. Once a business begins to engage in group decision-making, it has assembled the skills to formulate an owner agreement insurance the transfer of business value to the owner or the owner’s heirs to create personal wealth.