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Our Blog Has A New Home! The Elements-Ironstone Blog

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Happy February!

We are getting closer to spring each day according to the world’s most famous furry forecaster, Punxsutawney Phil. Our beloved groundhog did not see his shadow meaning we are set for an early spring!

We want to make sure you know our blog is now located on our website  www.ironstonehq.com/blog

We update our blog often with posts related to your business.  We strive to provide valuable content you can apply to your firm or practice each and every day. It is filled with information we have identified as 4 key performance areas known as the Fundamental 4™, which are required to design, develop and sustain a successful business.  You will find articles, research papers, best practice ideas and job aides available for you to download and put to use at your firm!

You can sign up to receive our blog through our e-mail subscription service. This means each time a new article is added, you will be notified directly in your in-box! We invite you to read the articles, connect to the post and add your thoughts and comments to share best practices with our online community. 

Simply click on the link and enter your email address.

Have an awesome one and enjoy what we are blogging about! We hope you find it informative, helpful and welcome your feedback! That’s all for today!

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To Your Success!

Your Ironstone Team
www.ironstonehq.com

• Email us at info@ironstonehq.com
• Call our office at 800-917-8020
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LEGAL ASPECTS OF THE SUCCESSFUL SUCCESSION PLAN

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Ironstone welcomes guest contributor, Scott D. Calhoun. Scott serves as Ironstone’s Legal Counsel and holds more than 25 years’ experience in corporate law. Scott advises clients on a full range of business matters. 
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Once you have decided to begin long-term planning for a successful succession of your business, you will need to make sure your plan is properly documented so that it will accomplish your goals.  This article concludes our series on succession planning.  Part I briefly outlined succession strategies and introduced you to the process.  Part II provided a more in-depth review of a number of key factors.  In Part III, we provide some insight into the details of properly implementing the successful succession plan from the legal perspective.
USE YOUR TEAM TO FORMULATE THE RIGHT PLAN FOR YOU,
THEN ORGANIZE ALL YOUR PAPERWORK

As we discussed in our earlier articles, formulating a proper succession plan starts with putting together a good team of advisors.  At a minimum your team should include your attorney and CPA, and you might consider adding an outside financial consultant to the team.   Think of your team as a coaching staff putting together a game plan.  Once all the coaches have met and hashed out various ideas, a master plan is put together.  As game day approaches, steps are taken so that the detailed game plan can be implemented.  Among those steps is putting your legal affairs in order, including:

  • Update (or make plans to update) your will or other testamentary documents
  • Make sure your corporate minute book is up to date and complete – including stockholder records and minutes
  • Confirm that all your corporate registrations and business licenses are current
  • Put in place all agreements with current employees that are necessary to preserve the value of your business – non-disclosure/non-solicitation agreements, existing shareholder buy-sell agreements, stock option or other equity participation plans

NEXT COMES IMPLEMENTATION DEPENDING ON THE NATURE OF THE SUCCESSION

If your plan calls for an INTERNAL succession (an existing partner or employee, or a targeted successor candidate, or a family member), several different arrangements could be used:

  • Transfer through existing buy-sell agreement
  • Establishment of stock option or other equity participation and transfer arrangement
  • Transfer through gifting program or limited partnership (especially useful with family members)

Each of these structures produces its own legal challenges and requires that specific issues be addressed. With respect to buy-sell agreements, you will need to focus on:

  • Triggers – buy-sell agreements can provide for the purchase and sale of stock in many circumstances other than death, including disability, separation or retirement, divorce, or even upon achieving certain performance goals
  • Valuation – how the company is valued at the time of the buy-sell is critical, and the methods of determining value are quite varied.  We strongly encourage you to decide on an appropriate valuation methodology at the time of putting the buy-sell agreement in place
  • Funding – perhaps the most important issue, how the buy-sell is funded can be the difference between a successful succession or the collapse of the business

If you are implementing a stock option or equity participation (or phantom stock) plan:

  • Appropriate grant percentages and formulas – the goal of these plans is to provide incentive for performance and also “skin in the game.”  Careful thought is required to ensure that these incentives are appropriate but not excessive
  • Triggers for payout – when will the stock be awarded or the compensation paid?  On sale of the business?  Other restructuring?  These are questions that need to be answered
  • Amendment and correction – these plans need to have flexibility, so the original document should allow for amendment within reasonable parameters

For limited partnership arrangements (can also use LLC) to transition to family members:

  • Control – this is a critical issue for first generation business owners.  The key point is to determine how to use this method of succession and maintain control until you are ready for the transition to be finalized.  This requires some care in planning and drafting
  • Gifting program and valuation – using valuation discounts and gifting of interests allows the first generation owner to leverage the gifts and maintain control
  • Commitment of family member – this goes back to the issues discussed in our earlier articles emphasizing the importance of selecting the proper persons to take over the business.  Make sure your chosen successor is in it for the long haul

If your plan calls for an EXTERNAL succession (sale to strategic partner, wealth management firm, or purely outside investor):

  • Due diligence – during the negotiation process, you will be asked to open your records for the buyer to conduct its due diligence.  As a seller, you should do the same to ensure that your buyer is who has been represented to you and that the buyer will be able to successfully complete the acquisition
  • Valuation and payment terms – these will be key issues in the negotiation process.  An important point to remember is that your notion of what your business is worth will almost never be the same as a buyer’s notion of what the business is worth.  Talk to your advisors about expectations
  • Security for payments – you will want to make sure you will actually get paid the amount agreed to for purchase of the business.  Proper security for those payments is vital

DEFINING YOUR FUTURE ROLE AND RESPONSIBILITIES

Part of the succession transaction needs to be a clear understanding of what your future role with the business will be.  In this regard, you will need to mindful of several issues:

  • Consulting or employment arrangements – if the deal calls for you to stay on in some sort of consulting or ongoing management role, your exact responsibilities need to be clarified and your compensation specified.  DO NOT allow yourself to believe that just because negotiations went smoothly and professionally, you will be able to “take it as it comes.”  Document everything.  If there is strong trust, all will go smoothly anyway
  • Non-compete agreements – you may be asked to sign a non-compete agreement.  This may not be a big deal if you are definitely retiring, but if you need some flexibility, you need to pay careful attention to these terms
  • “Earn-outs” – these are a popular means to keep initial purchase prices low.  If your deal includes earn-outs, make sure you are satisfied with the upfront and guaranteed money you will receive.  You should NOT count on getting any more
  • Taking the business back – this issue relates to making sure the purchase price payments are properly secured.  If the buyer cannot make the payments, you will want to have the ability to take the business back.  But be aware – it may not be worth much if these circumstances occur

NO ROOM FOR HANDSHAKE DEALS

In our previous articles, we have pointed out the need to prepare yourself for the transfer, take care in choosing your successor(s), and communicating with your clients and your employees.  These are all important factors in a successful succession plan.  So is communicating clearly with your team of advisors, especially your legal and accounting advisors.  The successful succession of your business and assuring that you receive proper value for your business depend on numerous factors, and the transaction will require careful paperwork.  There is no room for a handshake deal, or for whispered “back-room” arrangements with the potential successor.  These transactions do not have to be overly complex, but you need to make sure your advisors know everything that is important to you and then you need to trust your advisors to implement your plan successfully.

Using this approach, IRONSTONE can help you PASS THE TORCH effectively!

What areas of your succession plan need to be addressed? Let us know how prepared you                                                                            are for transfer by leaving us a comment or ask questions here!

Download The Entire Succession Planning Series

Download Ironstone’s Research White Paper

• Email us at info@ironstonehq.com
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Try These Fun Valentine Ideas!

 Be My ValentineHappy Valentine’s Day! I have to admit, I’m a bit of a romantic this time of year. I enjoy reminiscing about memories of making valentine boxes in elementary school, preparing Valentine’s for each person in my class and now enjoy the fun of the holiday in general.If you have been procrastinating, I have put some fun ideas together for you – bound to get you in the 

“I  small red heartyou spirit!”

  • Valentine Fun With Your Children – check this one out for cards, coupons, clipart, crosswords, coloring & more

I hope you can use some of these ideas!  Have fun and enjoy your day!


“The best and most beautiful things in the world cannot be seen or even touched. They must be felt with the heart.”

-Helen Keller

Let us know how you will spend Valentine’s Day! Share a Valentine memory with us by leaving a comment here!

• Email us at info@ironstonehq.com
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Creating An Ocean-View Culture – Is It For You?

iStock_000009568716MediumInterested in boosting employee productivity, engagement and loyalty? If you haven’t entertained the idea of creating a culture with an office desk on the beach, it is time to rethink the possibilities and go outside of the box. Employers are reluctant to entertain the idea of remote workplaces despite the benefits. Remote, virtual or telecommuting office culture is becoming more and more common as employees thrive and excel in their “beach setting” environment.

As a proponent of remote workplace alternatives, I have found from personal experience the benefits out way any disadvantages. Extending from coast-to-coast across the United States, the culture cultivated by our team provides:

  • Increased productivity
  • Increased creativity
  • Empowerment for employees
  • Increased loyalty

The virtual culture works for us by providing efficient time management and innovative ways to stay connected. Skype is a tool we use extensively.

Is A Remote Culture Right For You?

Granted, some professions require onsite presence. Firms now, however, have the opportunity to take a more flexible look at the standard office environment; allowing employees to use technology enabling them to connect and collaborate from anywhere.

Small changes can produce significant benefits simply by empowering employees to gain more control over their schedule. Studies have shown that telecommuters increase productivity by eliminating the worry of driving to work, cutting gas expenses and removing office politics. Firms who engage in creating a virtual culture reduce business costs on overhead, reduced sick leave and less turnover.

Research conducted at Stanford with a Chinese company reveals working from home is actually more productive than working in the office, as well as other benefits in the form of increased job satisfaction and fewer people leaving.  The study revealed employees who worked from home reported higher job satisfaction and were 50% less likely to leave than their colleagues who worked in the office.

Another study compiled information from Kate Lister, author of Undress For Success—The Naked Truth About Making Money at Home (Wiley 2009) and the whitepaper, Results-based Management: The Key to Unlocking Talent and Increasing Productivity. This research revealed virtual workers are more productive and happier than traditional workers.

Virtual Employees:

  • Best Buy, British Telecom and Dow Chemical found that virtual workers are 36% – 41% more productive.
  • The work-from-home nature of virtual work reduces absenteeism by $1,134 per employee, every year.
  • 79% of traditional workers would prefer to work from home and 61% would take a pay cut to be able to do so.
  • Virtual workers get an extra 2-3 work-weeks of free time in commuting savings and report they use this time to spend with family, friends and for leisure.

Traditional Employees:

  • Gallup found that 54% of traditional U.S. workers sleep walk through their day.
  • An additional 18% are “actively disengaged” (meaning they actively undermine what an engaged worker accomplishes). Together, these groups make up a shocking 72% of the traditional workforce.
  • Another poll found that 1 in 3 high-potential traditional employees do not put full effort into their job.

Times have changed, and with that, firms need to stay abreast of the options and benefits available to them. Leaders should face the importance of an employee’s autonomy and the increased results of productivity and fulfillment by incorporating or exploring a remote culture.  Lifestyle will often trump salary in an employee’s decision making process. Firms who embrace a remote culture can gain an edge in recruiting highly-skilled employees.

 Question:  Does your firm engage in a virtual employee culture?  If so, what advantages and disadvantages are you finding? You can leave us a comment by clicking here!

• Email us at info@ironstonehq.com
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SWOT Yourself! How I Saved Hours Every Day & You Can Too

fly swatter“Boss man, I just don’t have enough time to get everything done!” How often are you hearing this from your rock-star team? This time of year we should be feeling a sense of renewal and experiencing a fresh start! Often times, the opposite occurs as we are inundated with year-end reports, implementing new strategies and keeping up with daily business.

Embedded in my mind are the weekends as a youngster. Every Saturday, like clock-work, my mom and I had “chores” to do inside the beautiful farmhouse where I grew up. She always told me, “We have to finish our work first and then we get to go have fun.” Why that is stuck in my mind 30 years later, I have no idea. What I do know is she knew how to manage time.

We have all read hundreds of articles on time management tips, taken time management courses and received multitudes of advice. All of these workshops, articles and advice have provided me exceptional tools as well as vital components to effective time management. Time Management models will vary for each person on your team but the goal will be the same – Effective Time Management. I have found the best way to keep myself on track is through the development and use of a “model day” format where I create blocks of time from my job description.  I have taken my so-called short fallings from last year and incorporated time for interruptions, time for NO interruptions and time for unplanned urgencies. Start your new year with these simple steps, perform them yourself and then share with your team.

SWOT Yourself!  

Most of us have participated in SWOT analysis projects, but usually related to our overall business plan.  Have any of you or your team members performed a personal SWOT analysis? You can incorporate an individual SWOT analysis into your overall business plan; link them to personal team development, tracking goals and performance reviews. Once you have completed your analysis, incorporate your strengths, weaknesses, opportunities and threats into a list of tasks to complete with an action plan and make it happen!.  

Download Ironstone’s SWOT Analysis Template Here

Create Your Time Management Plan

Having a snapshot of how you intend to perform your day is essential to effective time management.  Time and time again I end up with “to-do” lists scattered everywhere, 10 post-it notes stuck on my desk serving the purpose of reminding me what needs to be done. Rather than giving me a sense of organization, I am bogged done with stress, anxiety and a sick feeling in my stomach caused by ineffective time management.

We have created a model day template to assist you to:

  • Manage time effectively
  • Improve organization skills
  • Boost time management skills

Ironstone’s template allows you to organize, track and monitor progress by providing 4 tabs within one worksheet.

  • My Model Day- Your model day is your intended plan for completing job duties. Use this as a guide to manage your time each and every day.
  • Time Management- Use the time management worksheet to gain understanding of how much time is spent on projects scheduled in your model day plan. You don’t need to do this on a daily basis; a periodic check will give you insight on how much time you are using wisely, wasting or necessary adjustments needed to improve time management.
  • Priority Items- At the end of each day, allow yourself time to organize and prioritize the most important tasks you want to accomplish the following day. This will allow you to start each day feeling energized, empowered and organized. Keep your priority items to 5 or 6 tasks depending on the amount of time you anticipate will be needed for each.
  • Other projects- I like using the “other projects” worksheet to record my never ending list of things to be done. Having this worksheet incorporated into my time management plan allows me to keep my “to-do list” in one location and transfer projects easily to my priority worksheet as others are completed.

 Download the Ironstone Model Day Worksheet  Here- Tip- add a worksheet to the template with a monthly calendar.

Question: What challenges do you face in your office with time management?  You can leave a comment by clicking here.    

Additional Time Management Resources;

• Email us at info@ironstonehq.com
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Jump In! Get Your Feet Wet In Social Media-How To Do It

get-your-feet-wet-idiom-meaning

Is your social media plan a simple act of dipping your toes in the water? If so, you should be prepared for the consequences of premeditated drowning by your competition. NOW is the time to jump in and get your feet wet. Social media is a critical business tool which is no longer considered a stand-alone marketing option; you must streamline it into your overall marketing strategy. If you haven’t read our article, Ready To Jump On The Social Media Bandwagon , review it now for simple and basic steps to get your toes wet. Today’s blog guides you further with a blueprint to incorporate social media into your overall marketing plan.

Financial advisors are expecting and planning for social media to play a meaningful role in 2013. Research conducted by LinkedIn partnered with FTI Consulting  reports seven in ten financial advisors are using social networks for business. Adoption rates will continue to grow as 2013 unfolds representing an 80% increase year-over-year. Advisors face unique compliance challenges unlike other professions, however, the good news is advisors recognize ways to overcome these obstacles.

According to Forrester Research, two-thirds of U.S. online adults with an investment account now have social network profi­les. Presented with the adoption rates of clients and prospective clients utilizing social media, advisors are facing their fears head on by linking social media strategies to their overall business and marketing plans.

7 Steps To Create Your Social Media Plan

1.  Establish Your Foundation- You know I preach “always begin with the end in mind”. The same holds true in a social media plan. Creating a social media plan requires a solid foundation and a vital first step. Many firms engage in social media but do not have a structure in place to support their efforts.   Identify your goals and objectives while ensuring they link to your overall firm goals. Keep your objectives SMART! (Specific, Measurable, Attainable, Realistic/Relevant and Timely). Read our blog, The Gold Rush To Social Media-How To Track Your Success, to gain insight on developing a secure social media foundation.

2. Identify Social Media Channels Best For Your FirmFind out what networks your clients and prospective clients are engaging. A simple start, and the most common, is to incorporate LinkedIn, Facebook and Twitter.

3. Create A Social Media CalendarThis goes beyond scheduling your own social media content. Schedule time to engage in conversation. Avoiding engagement in online conversation is the biggest reason for social media failure.  Tip: use social media streamlining to simplify your social media efforts. Hootsuite, SocialOomph and TweetDeck give you the ability to schedule and simultaneously post to social media channels.

4. Create ContentSchedule time for content creation. One of the best ways to organize your content is to create a library of topics relevant to your industry. Research and save documents in your library to compile information related to your chosen topics. If your firm has adopted blogging, which I highly recommend, use a blogging template.

5. Identify Contacts - Make connections by following relevant conversations. By interacting, connections will happen naturally. Tip: create a list of centers of influence you would like to connect with along with a plan for introduction. Share their content through re-tweets and shares.

6. Research Competition - Schedule time to stalk your competition. Find out what they are doing, what they are talking about and how they are engaging with others. Read their posts, tweets and blogs. In this case, advisors need to keep up with the Joneses.

7. Track and Measure Results - There are many ways and tools available to track and measure your social media efforts. To get started, refer to your goals and objectives you established in step one. Identify the increase in followers, engagement level, connections and leads you have made. Watch for our follow up in another blog with more information  for you to use in tracking and measuring your social media results.

Don’t become overwhelmed with social media. Have fun with it, follow these steps and reap the benefits.

Question: What do you think about social media?  What challenges or success have you experienced in social media? You can leave a comment by clicking here.

• Email us at info@ironstonehq.com
• Call our office at 800-917-8020
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A Must Read! Integrating Leadership Development With Succession Planning

Download Ironstone’s research paper here!

Create An Immortal Succession Plan By Integrating Leadership Development With Succession Planning

• Email us at info@ironstonehq.com
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