Dana Beck of the Center for Rural Affairs presented a power point display on creating a plan of succession for businesses. A plan keeps the business open and growing in small towns, she stated. (Republican photo)
By Carolyn Lee
The Imperial Republican
About 30 people attended a meeting concerning the transition of business ownership Tuesday night in Imperial. "Planning for Business Success" was sponsored locally by banks in the area, BW Telcom and Farm Credit Services of America in Imperial.
A presentation on the Rural Enterprise Assistance Project, or REAP, was the main focus of the evening.
Sponsored by the Center for Rural Affairs, REAP consists of the elements of networking, business management training, credit and technical assistance.
As representatives of businesses from Grant, Wauneta, Imperial and Benkelman listened, Tara Hosick of the Nebraska Department of Economic Development explained that when a Business Expansion and Recruitment survey was made in Chase and Perkins Counties recently, the main concern was the transition of ownership of businesses.
She said the concern was not just for the critical needs of the business, but also for the aging population in small communities. "What do you do about a business before you just close it?" she questioned, so that a community doesn't lose that business.
Randy Raile of BW Telcom of Benkelman said his family's fourth generation business is a case in point.
In 1989 his parents, the owners of BW Telcom at the time, were killed in an auto accident. There was no plan of succession in place, and not much estate planning.
Although he was able to take over operations, Raile said that under other circumstances, "the people you might want to sell to might not have the same morals and values." Small business is the character of little communities, he noted.
Sometimes it's better to have a business successor from within the community.
"Find an individual and teach them how to run the business," he urged.
How do you retain those individuals? Raile said a good pension plan and split-dollar life insurance to ensure longevity are the answer.
He also suggested a business evaluation for the true value every 10 years or so for IRS records, life insurance on the key business person to pay down taxes, and "last to die" insurance, for the health of the business concerned.
Dana Beck of the Center for Rural Affairs explained REAP's "Harvesting the Entrepreneurial Venture" to the group. Business succession is important, she stated, because one third of business owners in the United States are over the age of 55.
According to the Small Business Administration, the primary cause for business failure is lack of planning. At some point, every business owner leaves their business, she noted, whether voluntarily or otherwise.
Over two thirds of owners expect their business to remain in the family, while only 35 percent survive to the second generation. Business owners also think there is plenty of time to make a written strategic plan.
Beck said an advisory team can aide in a business succession plan. Team members may be an attorney, accountant, lender and financial planner and/or business consultant.
The team and business owner will assess the current health of the business, identify priorities, set time frames and communicate with each other.
Beck said the place to start is by updating the business plan, networking with other businesses, and identifying candidates as potential business transfers.
She also said that besides the team of advisors, a business owner might want to reach out to successors such as young adults and alumni from the community. Another plan is to involve youth in the community, to make them aware of business opportunities.
The evening was organized by the Chase-Perkins Counties Hometown Competitiveness Program, in partnership with the Imperial, Perkins County and Wauneta Chambers of Commerce.
The project is funded in part by a grant from the Nebraska Department of Economic Development administered by the Nebraska Rural Development Commission.
Leslie Carlholm, Economic Development Director for the City of Imperial, said representatives of the Creighton University School of Law will be in the area Feb. 11 to talk with business owners interested in creating a plan of succession. She may be contacted at the city offices for more information.
The Imperial Republican
About 30 people attended a meeting concerning the transition of business ownership Tuesday night in Imperial. "Planning for Business Success" was sponsored locally by banks in the area, BW Telcom and Farm Credit Services of America in Imperial.
A presentation on the Rural Enterprise Assistance Project, or REAP, was the main focus of the evening.
Sponsored by the Center for Rural Affairs, REAP consists of the elements of networking, business management training, credit and technical assistance.
As representatives of businesses from Grant, Wauneta, Imperial and Benkelman listened, Tara Hosick of the Nebraska Department of Economic Development explained that when a Business Expansion and Recruitment survey was made in Chase and Perkins Counties recently, the main concern was the transition of ownership of businesses.
She said the concern was not just for the critical needs of the business, but also for the aging population in small communities. "What do you do about a business before you just close it?" she questioned, so that a community doesn't lose that business.
Randy Raile of BW Telcom of Benkelman said his family's fourth generation business is a case in point.
In 1989 his parents, the owners of BW Telcom at the time, were killed in an auto accident. There was no plan of succession in place, and not much estate planning.
Although he was able to take over operations, Raile said that under other circumstances, "the people you might want to sell to might not have the same morals and values." Small business is the character of little communities, he noted.
Sometimes it's better to have a business successor from within the community.
"Find an individual and teach them how to run the business," he urged.
How do you retain those individuals? Raile said a good pension plan and split-dollar life insurance to ensure longevity are the answer.
He also suggested a business evaluation for the true value every 10 years or so for IRS records, life insurance on the key business person to pay down taxes, and "last to die" insurance, for the health of the business concerned.
Dana Beck of the Center for Rural Affairs explained REAP's "Harvesting the Entrepreneurial Venture" to the group. Business succession is important, she stated, because one third of business owners in the United States are over the age of 55.
According to the Small Business Administration, the primary cause for business failure is lack of planning. At some point, every business owner leaves their business, she noted, whether voluntarily or otherwise.
Over two thirds of owners expect their business to remain in the family, while only 35 percent survive to the second generation. Business owners also think there is plenty of time to make a written strategic plan.
Beck said an advisory team can aide in a business succession plan. Team members may be an attorney, accountant, lender and financial planner and/or business consultant.
The team and business owner will assess the current health of the business, identify priorities, set time frames and communicate with each other.
Beck said the place to start is by updating the business plan, networking with other businesses, and identifying candidates as potential business transfers.
She also said that besides the team of advisors, a business owner might want to reach out to successors such as young adults and alumni from the community. Another plan is to involve youth in the community, to make them aware of business opportunities.
The evening was organized by the Chase-Perkins Counties Hometown Competitiveness Program, in partnership with the Imperial, Perkins County and Wauneta Chambers of Commerce.
The project is funded in part by a grant from the Nebraska Department of Economic Development administered by the Nebraska Rural Development Commission.
Leslie Carlholm, Economic Development Director for the City of Imperial, said representatives of the Creighton University School of Law will be in the area Feb. 11 to talk with business owners interested in creating a plan of succession. She may be contacted at the city offices for more information.
“Planning for Business Success”
http://picasaweb.google.com/kevinpoppe13/BusinessTransferHTCImperial
Locally owned businesses mean big things for rural Nebraska towns and the successful transition of these businesses is vital to the future of our communities. All businesses will transfer at some stage of their life cycle, but only one out of three businesses have a written strategic plan for business succession and the majority of companies have no plan of any kind for continuing their business to the next generation.
Do you know where your business is headed? Would you like to find out where to start on the road to succession? Allowing adequate time for strategic business succession planning provides the opportunity for increased flexibility and creativity in transferring business ownership to the next generation.
Planning for Business Success is an “After 5 PM” Event organized by the Chase-Perkins Counties Hometown Competitiveness Program in partnership with the Imperial, Perkins County and Wauneta Chambers of Commerce to discuss these issues on Tuesday, January 29, 2008 in the Conference Room of the Imperial Inn, 748 East 12th Street, Imperial beginning at 6:30PM. This project is funded in part by a grant from the Nebraska Department of Economic Development administered by the Nebraska Rural Development Commission.
This event is open to all business people, potential buyers, farmers, and ranchers regardless of Chamber membership.
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“Planning for Business Success” Agenda
6:30 PM Welcome and Networking Time
7:00 PM Tara Hosick, Nebraska Department of Economic Development
7:10 PM Randy Raile, BW Telcom
7:20 PM Dena Beck, Rural Enterprise Assistance Project-REAP
“Harvesting Your Entrepreneurial Venture”
8:00 Questions, Evaluations and Wrap Up
8:30 PM Adjourn
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