Worcester Business Journal

wbjournal.com | August 22, 2022 | Worcester Business Journal 43 You've put in your time, worked your way up, and finally gotten the management promotion you so richly deserve. Or maybe you started a brewery or software company as a passion project, and now suddenly have a bunch of employees looking to you for guidance. Whatever your path is, here are some tips for first- time managers, so you can get your feet firmly planted on the ground. 3) Trust your employees. When it comes to employees, trust should be given, not earned, Ursula Kralova, chief people officer at Bloomreach in Slovakia, told the Harvard Business Review. First-time managers sometimes make the mistake of letting subordinates prove themselves, which Kralova said is a mistake. "People are hired because they are experts in their field or show potential to do great work," she said. "Withholding trust can make them feel you're not acknowledging the skills that brought them to the table in the first place, potentially leading to resentment." Instead, managers should trust employees are competent enough to do the work they've been assigned. 2) Don't isolate yourself. It's natural to want to prove yourself as a manager. All eyes are on you, so you might feel inclined to buckle down and do your work. And that's important, but part of being a manager is developing a network of people you can turn to for advice, Ian Daley, founder of Toronto-based consulting and training firm Daley & Co., wrote in the Harvard Business Review. "Ryan Hawk, the host of 'The Learning Leader' podcast, says that you need to start developing a personal board of advisors. This is a group of three to five people who can act as a sounding board, listen objectively, and provide you with unbiased advice when you need it most," Daley said. 1) Communicate and be transparent. While you want to trust your employees are intelligent enough to figure things out on their own, when you need something done in a certain way, it's important to be clear. "The more you communicate, the more trust will be built and the team will see you as an ally instead of an authoritarian," Melissa Lamson, president and CEO of Arizona-based Lamson Consulting, wrote for Inc.com. K N O W H O W Estate planning during a bear market 10 1: Y ou had a business idea, you've poured most of your life savings into realizing it, you've had some success, and now you're ready for the next step. Whether it's access to new business channels, wider distribution, or paying back your investors, getting your startup acquired is a way to take things to the next level. Here are three things to keep in mind, whether you're in discussions or just thinking about a sale. See where you can be valuable. It helps to create a product or offer a service you know will fold in well to the model of some of the business world's top players. Instagram, for example, was a photo and video platform that was eclipsing Facebook until it was acquired by the company now known as Meta in 2012. "To position yourself for an acquisition by one of the top performers, pay close attention to the direction they're going," journalist and digital consultant John Boitnott wrote for Inc.com. "You should be considering products or services that might fit in with that." Build relationships. It might seem obvious, but acquisition for acquisition's sake can lead to all-out disaster. Create relationships with companies who might be a good fit, but make sure the rapport is there before discussion turns to a sale. "e best acquisition offers will come to you unsolicited or in the guise of another motive," entrepreneur Joe Procopio wrote on Medium.com. "e worst offers are those that you solicit. It's like walking into a car dealership, announcing your love for a certain model, and then asking how much the red one costs." Give them a blueprint. If your product hasn't been launched yet, or if you haven't made a profit, it can be difficult for potential buyers to see the value in acquiring your company. at's why it's your job to sell them, Alejandro Cremades, author of "e Art of Startup Fundraising", wrote in Forbes. "Lay out a roadmap of where this acquisition can take your company, the products, the integration, and how your foundational assets will create value for an acquirer," he said. 3 T H I NG S I know about... ... Transitioning to a management role BY MATTHEW ERSKINE Special to WBJ I n April, the stock market officially entered bear market territory. Bear markets are when the market declines more than 20% below a recent market high, in this case the 52-week market high. Why the market has declined has been attributed to many different factors, such as inflation, the energy shortages, the war in Ukraine, and so on, each contributing to investor's fears and a desire by investors to cut their losses. In the short term, the volatility of the markets will remain, but estate plan- ning is a long-term strategy. Historically, bear markets are fol- lowed by bull markets, where the losses are more than recovered for those in- vestors with the stomach to stick it out. Indeed, the best growth in the market most oen comes in this subsequent bull market. Leveraging gifts e result is the bear market is an opportunity to take advantage of the decline in values in investments to leverage gis to appreciate in the future, as well as take advantage of current income tax benefits. Giing can be done in many ways, but the most common is either to make an outright gi or to make a gi over time. Either type of gi can be struc- tured as a trust. In either case, the possible gi tax due is based on the fair market value of the assets transferred as of the day the transfer takes place. If you gave away a share of Apple stock on Jan. 1, 2022, the fair market value would be $182.01. If you gave away the same share of Apple stock on May 24, 2022, the fair market value would be $139.325, which is 30.6% less taxable value than if you gave the stock at the beginning of January. When there is a recovery in the market, a company like Apple is more likely than not to lead such a recovery and even exceed the overall growth of the market in a recovery. In addition to the likely growth in the value of investments in a recovery, you are making a gi of the future income: dividends and interest paid by the investment. Split-interest gifts You can also make split-inter- est gifts. This is where you make a gift but split the interest in the gift between current beneficiaries and remainder beneficiaries, such as a grantor retained annuity trust, or GRAT. A GRAT is where you make a gift to a trust but retain the right to annuity for the term of the trust. De- pending on the amount of the annu- ity, the actual gift value of the GRAT could be reduced to near zero. If the assets appreciate in value at a higher rate than the payout of the annuity, then the remainder beneficiaries will end up with an amount greater than the initial gift to the GRAT. Many of these split-interest gis are sensitive to rising interest rates, and some have been targeted for more onerous tax treatment in both regu- lations and proposed new tax laws. e result is there may be a narrowing window in which you can use these giing techniques while the interest rates are at historical lows, there is a bear market, and while the tax laws and regulations are more favorable than they are likely to be in the future. Although the bear market and rising inflation cause a great deal of short term pain, if you have the stomach to stick it out, then the bear market is an opportunity to take these short-term lemons and make them into long-term gifting lemonade. Matthew Erskine is managing partner for Worcester law firm Erskine & Erskine. Reach him at (508) 753-7100. BY LAURA FINALDI Special to WBJ By Laura Finaldi Special to WBJ H O W T O G E T Y O U R S T A R T U P A C Q U I R E D W W W

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