How to plan a successful succession: Utilize your trusted advisors effectively

1. How to plan a successful succession: Utilize your trusted advisors effectively

2. How to have a successful succession: utilize your trusted advisors effectively Speakers: Mark Albrecht, CPA Chorteck, LLP Speakers: Josh Welsh, PC Meisner Tierney Speakers: Dave Giddings RC Insurance Moderator: Kristen Saranteas Wintrust Commercial Banking

3. What does succession planning mean to you? We will be discussing: How early you should start a plan The different types of succession plans there are How you can utilize your trusted advisors to make sure everything is in place when it does occur. Succession planning doesn’t always have to be a hard topic to discuss within your company…but if you do get pushback, let your trusted advisors, like those on this panel, start the tough conversations for you. - Kristen Saranteas

4. How should I use my trusted advisors in succession planning? In our often-served role as general counsel to closely-held businesses, we recognize that, first and foremost, we represent business owners—the people behind these businesses.  These owners have goals which are shaped by interests and desires extending well beyond their immediate (and oftentimes all-consuming) focus on running their business.  We view it as important to take the time to learn these broader goals early on in the representation.  How soon do they want to retire?  Do they have children involved in the business?  Do they have one or more key employees? What are their plans once they step-away from the business? While the answers to these questions undoubtedly assist us in determining appropriate strategies, the nature of the business itself can also play an important, and sometimes determinative, role.  For instance, there is potentially a significant difference in planning for a company which sells a service versus a company which sells a tangible product.  Sometimes the most important aspect of succession planning is not in implementing a formalized plan, but rather in recognizing the inherent planning difficulties and taking appropriate steps to account for the possibility that the business can’t or won’t transition as smoothly as one would hope.  It probably goes without saying that, irrespective of whether you’re looking to implement a true succession “plan,” or instead planning for the inherent difficulties in the succession of a business, it is best to address these issues sooner rather than later.  It’s  also best to involve other advisors in the process early so that everyone is on the same page and moving forward toward the goals established by the client. - Josh Welsh, Meissner Tierney

5. How should I use my trusted advisors in succession planning? Chortek provides accounting, audit and tax services complemented by technology consulting, forensic accounting and M&A offerings. We serve the business and individual financial needs of our clients through four offices; two in Wisconsin, one north of Chicago and our newest office in Washington DC. By offering numerous, interrelated services that are driven by exceptional leaders, we are able to provide tremendous value to our clients’ business and personal financial needs. Our clients refer to us as trusted advisors. That means we are typically their initial point of contact, but it also means we know when to bring additional resources into the discussion, such as service providers like the ones sitting up here. It’s these types of relationships that help differentiate Chortek from other accounting firms. Over the past 65 years, we have worked with many of the financial institutions represented in this room. When your clients require expert guidance, prompt results and a consistent experience, trust Chortek to meet expectations. For those of you in the room who are business owners, you have a responsibility to grow your company. Many of the services offered by Chortek are designed to give you the freedom to do just that. I look forward to the upcoming discussion on succession planning and hearing the questions you and your clients have regarding this topic. - Mark Albrecht, Chortek, LLP

6. How should I use my trusted advisors in succession planning? • Do you have a business continuation plan? Typically, successful family and closely held businesses follow a business plan aimed at maximizing profits. But, to maximize the value of their businesses for their own benefit and their heirs, business owners will need more. A business continuation plan may complete the equation. • The death, disability or retirement of an owner or partner of a business can cause financial problems and hardship for the business. Buy-sell agreements are plans used by members of a partnership and stockholders in closely-held corporations to assure that funds are provided to allow remaining owners to buy the deceased's portion of the business. In order to guarantee a buyer for the interest in a business, consideration should be given to a lifetime agreement among the business owners as to how to dispose of or continue with the business. - Dave Giddings, CLU, RC Insurance Services, Inc.

7. The Role of Advisors in Succession Planning

8. Commonly asked questions 1. Who do you have to succeed you? 2. How would it be funded? Traditional bank funding Life Insurance ESOP Venture Capital • Children • Other Family Member(s) • Key Employee(s) • Competitors • Outsiders

9. Commonly asked questions 3. What should you be doing today to prepare for a sale? • Timely audited financial statements • Processes & Procedures documented and available • Good internal financial reporting • Clearly defined organizational chart • Management Preparation • Tax Planning • Structure • Informing key employees – stay bonuses?

10. Commonly asked questions 4. Important Documents for Succession Planning • Wills & Pour-Over Trusts • Other Trust Arrangements • Redemption/Buy-Sell/Cross-Purchase Agreement • Charitable Inclinations

11. Commonly asked questions 5. What types of Insurance Coverage should you be looking at? • Property & Casualty Insurance • Tail Coverage • Cyber Liability • EPLI • Product Liability & Malpractice Coverages • Umbrella Policy • Harassment / Cyber Crime / Technology Coverages • Life Insurance/Disability • Buy-Sell Coverages

12. Recommended reading The Seven Habits of Highly Effective People – Steven Covey E-Myth Revisited – Michael E. Gerber THE GOAL-A Process of Ongoing Improvement – Eliyahu M. Goldratt 7 Jeff Cox The Go-Giver – Bob Burg & John David Mann The Great Game of Business – Jack Stack Beat the Sharks -- Steven Goldfarb How to Run Your Business So You Can Leave It In Style -- John Brown