[Podcast] Episode 7: Is an ESOP Right For Your Remodeling Business?
by Dave Kelley in Admin & Human Resources, Business Management, Financial Management, Podcast, PowerTips, PowerTips UnscriptedWhen it comes to succession planning and determining an exit strategy from your remodeling business there are plenty of options to consider. Many of our Roundtables members have either sold or handed their businesses off to the next generation, for example… but all of them will tell you that making that determination early in your company’s lifespan can be critical to the success of your plan. In today’s Episode of PowerTips Unscripted, Victoria and Mark explore an area of succession planning that is somewhat new to the remodeling industry, by talking with Anthony Mathews, a thought-leader in the area of creating and maintaining ESOPs, or Employee Stock Ownership Plans. Anthony has spent the past 40 years helping business owners and employees transform their companies into communities of stakeholders through the creation and maintenance of ESOPs – many of them for construction companies. Most recently Anthony has spent the last decade at the Rady School of Management at the University of California, San Diego, teaching future business leaders and advisors. Anthony describes what he refers to as a “Succession Crisis” in this country where closely held companies get to the end of their life span and simply close or liquidate. When that happens, the owners may (or may not) receive full value in the business, employees lose their jobs and towns and cities are faced with yet another business that is no longer a part of their business community. Anthony, Victoria & Mark discuss:
- What type of company sets up an ESOP? Size? Number of Employees? Characteristics?
- What is the process of establishing an ESOP?
- What are some of the challenges companies face?
- What makes an ESOP different than a 401K, Profit Sharing or other plan?
- What are the Tax Advantages that companies and employees will see?
- How does having 10-30 owners effect the company culture?
- Anthony’s 4 phase process of determining if an ESOP is right for a business