[caption id="attachment_46935" align="alignright" width="216" caption="Jim Andersen, Bill Schrader"][/caption]
NORTH BAY -- One of the many headaches caused by the recession has been for business owners who were close to enacting their exit strategy.
Particularly for those looking to finance retirement through the sale of their business, the sluggish economy has slashed expectations for revenue and forced many to put off those plans.
“There is rarely a pot of gold at the end of the rainbow. Anyone who is selling a business had better have other resources available for retirement -- 401(k), savings, etc. -- if they plan on retiring comfortably,” said Jim Andersen, a partner in the Consulting & Business Valuation Services Practice of Burr Pilger Mayer in Santa Rosa.
Mr. Andersen will join some of the North Bay’s leading succession experts taking part in the North Bay Business Journal’s Jan. 18 event, “Who will take over your business?”
Attendees will hear two case studies of succession plans enacted successfully despite the embattled economy: Greg Hurd, principal and vice president of the Redwood City-based engineering firm BKF Engineers, will share how the firm successfully merged with North Bay engineers Carlenzoli Associates in 2009. Tom Fraser, president of San Rafael-based WRA Environmental Consultants, will recount the long-term plan to pass ownership to employees of the company.
The two approaches mark some of the options available to business owners, and each was planned over several years.
In the case of BKF, Mr. Hurd said at the time of the merger that informal talks had occurred over several years. The new company, BKF/Carlenzoli Engineers, Surveyors and Planners, was launched after a year of negotiations.
Succession at WRA unfolded over 30 years, when founding partners Michael Josselyn and James Bucholz noted that they wanted to one day transition to a lesser stake in the company. They chose to begin an internal transfer, making employees shareholders and identifying who would be appropriate to one day take control.
Another panelist, Exchange Bank President Bill Schrader, said that companies across nearly every sector in Sonoma County have suffered enduring challenges from the recession. With the value of businesses driven downward, Mr. Schrader said that many owners who planned to sell are putting off those plans while strengthening their balance sheets.
“During these difficult days of recovery, most of our surviving businesses have adopted as many operating efficiencies as they can find in order to trim costs and operate profitably with lower margins,” he said.
The bank president said that many were expecting modest improvement to the economy in 2012, and that carefully planned mergers could sometimes result in a company greater than the sum of its parts.
“Those that have weathered the last three years are certainly a leaner group and, I believe, a more competitive group than ever before,” Mr. Schrader said. “Given a return to an even modest recovery, I believe there are reasons to be confident about the resiliency of these determined operators.”
Joining Mr. Andersen and Mr. Schrader on the panel will be Richard Abbey, partner at the law firm Abbey Weitzenberg Warren & Emery. The event will be held at the Hyatt Vineyard Creek in Santa Rosa from 4 to 6 p.m.