Succession Secrets

Succession Secrets

By Steve PredaBusiness
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Succession Secrets episodes

  • 076 - Pick One You Trust and Trust Them
    In today’s episode, I am sharing two stories from my time as an investment banker. The first is about a large construction company, where the owners got greedy and second-guessed their advisor. The second is a company where the seller had complete confidence in us.  As you may have guessed it, these two deals turned out very differently.

    Listen to my stories making the case that if you cannot trust your investment banker, you should not hire him or her. Do your due diligence up front and make a decision only when you have found the right candidate. It is a critical decision, as all things being equal, the quality of the negotiations on your behalf is directly correlated to the level of trust you are willing to invest into your advisor relationship.

    Check out the show or the transcript at http://successionsecrets.com.

    Your succession (and trust) is your success!
    17 min
  • 075 - Leave No Room for Excuses

    Can you recall the life and death Hungary-Portugal soccer game at the Euro 2016 championships?  After Hungary snatched the lead the third time with a goal bouncing off a defender, Cristiano Ronaldo was caught on camera in a fit of frustration. This scene was circulated on the internet as “evidence” of Ronaldo being a “spoilt” star who cannot control himself. Check the video on Youtube: https://www.youtube.com/channel/UC4p0DG02urAupV3t164gT2A

    I drew the opposite conclusion.

     

    Listen to the show, or read the transcripts, to learn why it was a sign of Cristiano’s brilliance and how this attitude helps him be a champion, which he and the Portugal national side ultimately became.  http://successionsecrets.podbean.com/

     

     

    Your succession is success!

    10 min
  • 074 - Become Your Own Client
    A client of mine who owns a business development consulting firm has recently found his pipeline drying up. It looked like a case of the “cobbler’s son going barefoot”, as his employees were stretched thin servicing clients and claimed to have had no time left to drum up business.

    We brainstormed different solutions until we arrived at the conclusion. He had to become his own client.

    Listen to today’s show to learn the details of our finding and how that strategy can fix my client’s lagging sales effort.

    Thank you for listening. If you have a question about succession (in the broad sense), please tweet it to #asksuccessionsteve or email it to [email protected].

    Your succession is success!
    8 min
  • 073 - The Constructive Role of Procrastination
    Procrastination, the action of postponing or delaying something that needs to be accomplished, is generally seen as a negative habit, that we should all try to kick. Psychologist attribute it to perfectionism, laziness, distraction and other negative factors. However, I have found procrastination to affect almost everyone to some extent, even diligent and disciplined people. In today’s episode, I am making the case that procrastination may be a useful activity that allows us to get things done. I have identified 5 things that procrastination allows us to have, all of which help performance.

    Tune into the show or read the transcripts and let me know what you think of my theory.

    Your succession is success!

    11 min
  • 072 - The Cost of Not Creating Succession
    Many ask me why “succession” is such a big deal. You will take care of it when you want to retire or sell the business. And what if you just want to work into the sunset?

    In today’s episode, I share with you the six most important reasons why it is a fatal mistake to neglect succession. Some of these reasons will surprise you, especially the last one.
    9 min
  • 071 - Three Ways to Value a Business
    We used to make elaborate valuations to clients, sometimes using 6-8 different methods to value a business.  Some clients need this sophistication and are willing to pay for it. However, there are really three main ways to value a business.

    The first one is the market-based valuation. Based on a multiple of a metric, which could be revenue, net profit, EBIT (Earnings before Interest and Tax) and most frequently EBITDA (EBIT plus Depreciation and Amortization). EBITDA is the best proxy for cash flow and banks and private equity groups love it.  

    The second method is the discounted cash flow based valuation, which determines the value of the business as the sum of the present values of its projected future cash flows. This is relevant when higher than the market value.

    The third way is replacement cost valuation, which works as a sanity check for the investor, to make sure they don’t overpay.
    9 min
  • 070 - Growth is Where the Discomfort is
    Had a great session with one of my Vistage members this morning. We reflected on the last meeting, which she thought was one of the best… while I thought it was a disaster… (check out episode 053).  I came to realize that that for any of our meeting to be worthwhile, there must be some drama or conflict happening. We learn nothing if we are just nice and courteous and don’t bank heads or confront each other.  

    Personal growth requires stretching ourselves, which is uncomfortable. Tune into the show or check out the transcripts at http://entrepcoaches.com. 

    Your succession is success!
    6 min
  • 069 - Ways to Pay a Purchase Price
    There is an investment banking proverb which says: “You can name your price if I am allowed to name my terms.” The purchase price for a business can be paid in different forms allowing the buyer to save cash and share some of the risks of the business with the seller.

    The most common is of course cash, but it's rare that 100% is paid up front. Typically 10-30% of a cash price is held in escrow to secure the indemnities the seller is willing to grant to support their representations and warranties in the sale and purchase agreement.

    Next up is a seller note and IOU issued by the company or the buyer, promising to pay a fix, non-contingent purchase price amount to the seller upon repayment of other acquisition debt. Common is SBA financing deals.

    Tune into the show to learn about the other 3 main forms purchase price takes in mergers and acquisition and business brokerage transactions.

    Read the transcripts at http://entrepcoaches.com. 

    Your succession is success.

    12 min
  • 068 - Explosive Family Transition
    Last week at a Charlotte Vistage seminar a colleague of mine told us a story of a family business transition that was potentially explosive. The founder bequeathed a family business to his son and daughter, who became equal shareholders. The founder’s son took over running the business while his daughter stayed out of the company and continued her career. In a few years, the business was doubled in size and tripled its profits. When the founder got sick, my friend got into an uncomfortable position. He wanted to buy out his sister before their father would die.

    Listen to today’s episode to find out what happened to this family and how certain entrepreneurs handle family transitions.

    Read the transcripts at http://entrepcoaches.com/podcast.

    Your succession is success.
     
    Visit Us: https://entrepcoaches.com/steve-preda/
    7 min
  • 067 - Let Your Cash Flow Build Your Business
    I am surprised to see the number of loans and financing offers banks and lending companies issue to small business owners.  And when those businesses start to make a profit, venture capital companies jump into the fray.

    It is not money these start-ups need but talent and time to create a differentiated service that is able to gain traction in the marketplace. Large successful companies like Google often spin off entrepreneurial talent supported by minimal resources to let them experiment at low cost and develop something marketable.  

    In fact, it is often much easier for a small business to be profitable, as the low-paid founders wear multiple hats and work around the clock.

    Tune into today’s show about starting a business and why it’s not about the money.
     

    Your succession is success!
    7 min

About Succession Secrets

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Daily bite-size life lessons and insights, from Succession Coach, Entrepreneur, former Investment Banker and Father of Four. Visit Us: https://entrepcoaches.com