Hartford Business Journal

www.HartfordBusiness.com • February 24, 2020 • Hartford Business Journal 23 Having a Chief Operations Offi cer in place who could assume a primary leadership role during a search for a per- manent CEO would be very benefi cial. Leahy reiterated that planning helps minimize the fi nancial repercussions from a catastrophe and keeps the company running and intact. These principles apply to companies of all sizes, from a ten-person operation to those with hundreds to thousands of employees. It's important for the owner to have clarity in how he or she wants to transition the business. Whether that is an internal or external transition, the size of the company may dictate this — an extremely large company may be diffi cult to transfer to a single family member. Regardless, the goal is to be able to transfer a company from a point of strength not from a point of weakness when the owner has to sell. Weigh Internal vs. External Transition When transitioning a company to a family member does not present the optimal solution, the owner may look to an external source, such as a private equity fi rm. However, Leahy pointed out that external succession is more likely for a larger organization. Furthermore, small, family-owned busi- nesses create a "family feel" to the company. Owners feel a responsibility to their employees and run the risk of derail- ing careers if an external fi rm purchases the company and makes major layoffs. "A much larger organization is probably much more valuable and, in any case, without a founder, it may be nearly impossible to transition internally," he said. Again emphasizing the importance of early planning, Leahy reported that options become limited when the owner waits until approaching or surpassing typical retirement age. "We have seen owners plan to sell a business when they are 65 or 70. They think they have someone lined up and have worked out all the details," he said. "Suddenly the person they thought would buy the business backs away and now they're back at the drawing table trying to fi gure out what to do." Trust the Experts Leahy said, "We created the fi rm with the goal to have a team with experience in working with business owners and succession planning." He pointed out that this multifaceted process involves psychological and emotional factors. "If you don't have experience and don't understand the issues beyond the legal and tax, there's a good possibility the transaction will not work out. We're an organization with a deep bench. We are a fi rm of CPAs and Certifi ed Financial Planners with broad experience, not an organization of one or two advisors," he said. Completely independent, the fi rm sells no products, has no confl icts of interest and matches clients and planners who make the "best fi t." Furthermore, the fi rm embraces its fi duciary responsibility, i.e., always acts in the best interest of its clients. Also, external factors, such as a trade war, changes to unemployment and interest rates, or purchase offers from competitors, illustrate the need to revisit goals regularly. For instance, a son or daughter slated to take over pursues a different career path and is no longer interested in continu- ing the family legacy. "You need to continue to have those conversations to make sure you stay true to your ultimate business and personal goals," said Leahy. As Connecticut Wealth Management has grown per- sonnel, clients and assets, it has reexamined its goals on different occasions. For example, we have had fi nancial planners/fi nancial fi rms reach out to us to acquire them be- cause they don't have a succession plan in place, accord- ing to Leahy. "We try to reimagine our reason for being on a regular basis. This really helps make us a better company and leads our colleagues in the right direction," he said. Succession planning should be done in the context of all aspects of one's fi nancial fi gures, but should also present a truly comprehensive and holistic picture that includes busi- ness, personal and emotional factors, according to Leahy. Learn more at ExperienceGenuine.com S P O N S O R E D C O N T E N T " " Leahy reiterated that planning helps minimize the nancial repercussions from a catastrophe and keeps the company running and intact.

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