For the entrepreneur, there’s usually much more to personal finance than a W-2 employee content to passively funnel money into 401(k)s and IRAs full of mutual funds.

Here are three key questions to ask yourself when planning for future success.

Are you taking advantage of all the legally allowed tax savings? The IRS tax code is more than 5,700 pages long (over 75,000+ pages if you count supporting documents like court case rulings). That includes which deductions you can take and which strategies you can implement. Whether it’s forgetting to deduct the interest from business loans, paying business items on a personal credit card, not recording self-employed health insurance properly, or forgetting to write-off business transportation taxes, missed deductions add up fast.

Do you have the capital to take advantage of growth opportunities and to get through hard times? With enough liquidity in your “back pocket” you can greatly reward your business and even save it in the future. For example, if the right business opportunity comes along and it requires a capital investment, you’ll be able to act quickly. Additionally, if your business hits a rough patch, you won’t need to look at financing options to get through the tough times.

Do you have an estate plan in order? It seems morbid, but it’s a vital issue to address. What happens if you’re not around anymore? Do you have a succession plan for your business in the event of incapacity or death?

Proper estate planning—deciding on the “who, what, when, and how”—and executing this with the least amount paid in taxes, legal fees, and court costs possible is a challenging affair. Start early.

Proper business planning is a complex and on-going effort. It requires expert counsel from a professional with knowledge and experience, one who’s familiar with the challenges that characterize an entrepreneur’s business ventures.

Talley shares the same entrepreneurial spirit that has helped propel our clients to their current levels of success. With over 25 years of experience helping high net worth individuals and business owners, Talley has the expertise necessary to assist entrepreneurs throughout their entire journey, from formation through succession.

Intel CEO Brian Krzanich resigned yesterday, following an ongoing investigation into a past consensual relationship with an Intel employee that violated the company’s non-fraternization policy. For the first time in its 50-year history, Intel will likely have to do something it has never done in response to its latest CEO stepping down.

While all of Intel’s previous CEOs at the company have been promoted from within, the company says it is considering both internal and external candidates for the top job and is using an executive search firm to help fill it. Few obvious candidates to succeed Krzanich are waiting on the benches at Intel, making it more likely that Intel will have to attract a CEO from outside of their organization for the first time in company history.

During Krzanich’s short time as CEO, Intel underwent a major restructuring. The company canceled its Atom processors that were supposed to compete with Qualcomm’s Snapdragon line, and even signed a deal to produce a competitor’s chips in Intel factories. The new CEO will be expected to continue to show progress in areas that Krzanich showed promise in, including dealing with the resurgence of AMD, coming up with new solutions for the likes of artificial intelligence, driverless cars, and their emerging graphics processing unit business.

While Intel’s succession plans are still up in the air, for now, securing Intel’s future growth will be a tough job for Krzanich’s successor.

In what can be a harrowing process, many business leaders who do attempt to create an exit plan take on too many tasks by themselves. Others simply don’t start early enough to identify and prepare the right people for future roles. With so much at stake – both emotionally, financially and professionally – the key is simply to bite the bullet, start early, and be thorough. Doing so can create a smooth transition that keeps confidence strong among customers, investors, and employees. This confidence can play a major role in ensuring the success of your company’s future and enhancing your own personal legacy.

On Sunday, Federer became the oldest man to win Wimbledon when he won the tournament for a record 8th time and extended his lead in most Grand Slam titles held by a man in the Open era; he now has 19 Just as older tennis players are working longer, Americans are too. In May 2016, almost 20% of Americans 65 and older, roughly 9 million people, were employed full- or part-time, up from 4 million in 2000. Here are some things all entrepreneurs can learn from Federer’s example of career longevity and success.
Find ways to prevent burnout. Many workers don’t take all their vacation days for various reasons, but taking time off to recharge or do something that’s important to you outside of work can pay off.
After losing at Wimbledon a year ago, Federer took some time off to recover from some nagging injuries and rested for 6 months. When 2017 came around, he entered and won the year’s first Grand Slam tournament, the Australian Open. He skipped the year’s second Grand Slam event, the French Open, to give his body time to rest.
He then returned to the tour and won Wimbledon. Federer realized, as he has gotten older, that he needs to give his bodymore time to recuperate. After he won Winbledon, he told ESPN, “If I don’t play too much, I won’t be as tired and hurt.”
Use your experience to your advantage. Federer has turned his age into a positive and put his experience to work for him. When he was serving for the Wimbledon title at 5-4 in the third set, Federer said he told himself he was going to lose the set. He reasoned that he’d never won Wimbledon without losing at least one set over the two weeks. And if he won his service game, he wouldn’t have lost any sets.
When Federer mentioned this to Paul Annacone, his former coach, Annacone was surprised and said a younger Federer never would have done that. But in the end, Federer won the match and the title. The anecdote shows he has come up with new approaches to competing as he has grown older.
Those who want continued success adapt to change. Workers who fear they’re becoming obsolete can take a cue from how Federer has had to adapt to modernization. A 35-year-old Federer had to switch to a more modern tennis racket, one with a larger head size and more power. His career goals have changed too. In his early playing days, being ranked No. 1 in the world was the most important thing to him. But now he is happy to be competing at the highest level, on the world’s most famous tennis courts -winning more Grand Slam titles is a bonus.
Proper business planning is a complex and on-going effort, requiring expert counsel—a professional with knowledge and experience, familiar with the challenges that characterize an entrepreneur’s business ventures. Talley LLP shares the same entrepreneurial spirit that has helped propel our clients to their current level of success. With over 25 years’ experience helping high net worth individuals and business owners, Talley has the expertise necessary to assist entrepreneurs throughout their entire journey, from formation through succession.

Tom Brady -who earlier this month led the New England Patriots to a comeback Super Bowl victory- may be 39, but has no plans to retire before next season. He told the Fox pregame show that there was “no way” he’d retire if he won the championship: “This is the time to capitalize. I’ve worked too hard to get to this point.”

The prime of your career is most likely the best time to capitalize on your earnings. Unlike Brady, who is most likely could live quite a comfortable life if he decided to hang up his cleats and pads after winning the big game’s MVP honors, most of us need those prime-year earnings, even if you’ve topped your earnings potential.

We need those prime earning years to shore up our retirement funds. Americans ages 35 to 44 have a median balance of just about $24,000 in their 401(k)s, for ages 45 to 54 it’s $46,200 and from 55 to 64 it’s about $71,500, according to 2016 data from Vanguard. Experts say that’s far too little: Fidelity Investments recommends that by 40 you have three times your salary saved, which for the median household would be roughly $150,000; by 50 it would be six times your salary, or $300,000.

On the other hand, there may be a risk to staying at your job. For example, your performance could decline, as may be the case for Tom Brady. As Brady grows older in age, he is more likely to become injured playing football and some say he could tarnish his reputation with poor performance. A valid point, but having more championship rings than any other quarterback in NFL history (five) would most likely far outweigh any damage he could do to his legacy on the grid iron.

Most of us don’t have such options, like parlaying his success on the field into a broadcasting gig, or Brady’s bank account, so continuing to work during your prime earning years is most likely a solid strategy.

In what can be a harrowing process, many business leaders who do attempt to create an exit plan take on too many tasks by themselves. Others simply don’t start early enough to identify and prepare the right people for future roles. With so much at stake – both emotionally, financially and professionally – the key is simply to bite the bullet, start early, and be thorough. Doing so can create a smooth transition that keeps confidence strong among customers, investors, and employees. This confidence can play a major role in ensuring the success of your company’s future and enhancing your own personal legacy.

Ultra high net worth individuals (UHNWI) will transfer an estimated $3.9 trillion to the next generation over the next 10 years, enough to purchase the 10 largest companies in the world, as shown by a Wealth-X and NFP study. Considering the fact the the average UHNWI is almost 60 years old and 64% of this demographic is self-made, many will be dealing with complex estate-planning matters for the first time in the not-so-distant future. Here’s what’s at stake.

The report found that 64% of the UHNWI population (defined as those with $30 million or more in assets), created their own wealth and did not inherit it, making it likely that any given individual within this segment will be considering the transfer of significant wealth for the first time in their lives.

Without proper planning, this group could lose up to half their wealth through inheritance taxes. These assets could be subject to as much as 40 percent of their value in inheritance taxes, with state taxes ranging between zero and 16 percent.

The question is whether UHNWI and their heirs will be prepared. To keep any fortune intact as the baton is passed, effective estate planning has to be a top priority—and early on—to accommodate various types of asset holdings.

For example, private businesses make up the largest category of wealth from HNWI in this study, at 36% of total value. This means decisions need to be made about whether these businesses will be transferred or sold, and succession plans need to be implemented—a process that doesn’t happen overnight.

Other assets such as public holdings (24 percent), cash (34 percent) and real estate (6 percent) require additional tactics for preservation. Philanthropic transfers make up yet another category of planning.

Successful wealth transfer is an effort that doesn’t rest on the shoulders of the affluent individual alone. Educating the future generation and discussing options with knowledgeable advisors are essential to building a strong financial legacy.

And while the UHNWI from this report have enough at stake to warrant immediate attention, so does any family with a business, real estate holdings, household property, liquid savings, or stock investments. Whether your assets make up part of the $3.9 trillion to be transferred over the next decade or not, the only way to make sure more of your money goes to the people and causes you’d prefer to have it (over the IRS) is to plan for it with your advisors.

Source: www.wealthx.com September 15, 2016

When Dick Costolo decided to step down as CEO of Twitter earlier this summer, he had already known for quite some time his days were numbered. He even offered to step down last November and again in February amidst reports of Twitter’s disappointing earnings. His departure in June certainly did not surprise many who follow the company. What surprised many is how Twitter handled Costolo’s exit.
The search for Twitter’s new chief executive is now three months old.  Rather than announce a new CEO, Twitter brought back co-founder and former CEO Jack Dorsey as interim CEO. Though many predict Dorsey to eventually get the nod for CEO, he is also CEO of the mobile payments company he co-founded, Square, Inc., which is purportedly set to go public later this year.
Most corporate boards would not consider naming Dorsey as CEO if he were to remain CEO of Square. Twitter has also noted that it wants a chief executive who can make a full-time commitment to the company, citing that the mobile service needs strong leadership to help reverse stagnant user growth and a steady stream of high profile executive departures. 
CEO succession planning (both emergency and long-term) can be a complicated process, especially so for a public company. Not having a clearly articulated plan in place leaves Twitter open to commentary from all sides, and can create damaging uncertainty with investors. Bringing back Dorsey, even short-term, demonstrates Twitter most likely did not have an adequate plan in place for Costolo’s succession. Months without clear leadership for any company can also create political minefields, with key personnel jockeying for positions in the senior ranks (or jumping ship in Twitter’s case).
While Twitter will neither be the first nor last organization to struggle with succession planning and execution, it exemplifies an issue that any corporation, large or small can fumble on. While the situation is unfortunate, it is far from uncommon. The reality is, and perhaps understandably so, planning your exit isn’t usually the most exciting or pressing task for a leader, but it is essential.
In what can be a harrowing process, many business leaders who do attempt to make a plan take on too many tasks by themselves. Others simply don’t start early enough to identify and prepare the right people for future roles. With so much at stake – both emotionally, financially and professionally – the key is simply to bite the bullet, start early, and be thorough. Doing so can create a smooth transition that keeps confidence strong among customers, investors, and employees. This confidence can play a major role in ensuring the success of your company’s future and enhancing your own personal legacy.
What If? Let’s be honest, succession planning is not a topic that comes across an entrepreneur’s mind frequently. After all, we’re all occupied with creating successful ventures. But let’s imagine for a second, after years of effort, you suddenly become ill, pursue opportunities outside of your professional career or just feel it’s time to step down.  Your company may be in good shape, but is it positioned to operate successfully without you as its leader? 
It is difficult for the busy owner of a mid-sized company to make a serious effort toward succession planning and start-up entrepreneurs contend with a roller-coaster ride that divides and challenges attention every day—never mind straining to focus on the distant future toward something called Succession Planning.  Nonetheless we’ve already seen the disaster levels escalate when there was no succession provision as we reported in the case of Microsoft’s Steve Ballmer’s abrupt exit—minus a replacement CEO prepared to take the helm. 
THE “NOW IS BETTER THAN LATER” STRATEGY:  The importance of succession planning is such that it requires careful thought, far in advance, about the resources you will need to develop in order to ensure your successor will carry on the vision you’ve taken years to advance. Think of it another way:  planning for succession means planning for success and the sooner you start planning, the sooner you can secure the objectives that effective succession planning requires.
RESOURCES Roughly 60% of first level managerial positions and 52% of senior positions are hired from within.  Recruiting from outside the company can also run up expenses in record time and may take a year or more before the right person appears. In the meantime, the company is at risk without a take-charge individual in the wheelhouse, steering the course, perhaps during a trying time made worse without expedient action to fill the office.
Then there’s the “getting acquainted” factor—orienting the new individual to the work, company culture and personality.  Which may not be easy when internal management has been “passed over.”  Those who have been with the company for years couldn’t help but feel a negative effect on their morale, unless they have somehow been properly prepared to accept an outsider. 
STRUCTURING THE FUTURE TODAY  To address the resource dilemma, there are two main processes that lead to effective planning:
  • Establish a depth of commitment within the company that spells out HR required standards of quality and officially burdens all managers with developing and having their successors in place.
  • Encourage employees to remain in the company by creating a proactive program of performance objectives and reward achievement to develop a strong back bench of candidates, one of whom is ultimately your choice for the next CEO.
PROFESSIONAL SUPPORT ENSURES SUCCESS  To prepare our clients with the most appropriate planning strategies Talley & Company delivers expert counseling to entrepreneurs, C-suites and management groups. Providing them with training, tools, and resources allows them to monitor a flexible road map, based on the company vision, while their business grows toward the time when they can position the best successor their organization needs to continue to thrive.
April 25, 2014
On April 3rd, Letterman broadcast his plans to retire from the show he created. CBS announced just one week later that Colbert, host of the Comedy Central show “The Colbert Report,” would be Letterman’s replacement. While Letterman won’t actually be leaving until next year, the speed and decisiveness of the transition to the public eye was no funny business. With Colbert quickly given the nod, the network has avoided a prolonged period of speculation for fans, endless scrutiny from Hollywood news outlets, and possible in-fighting among internal candidates and stakeholders.
Was it a surprise to executives that Letterman would retire one day? It shouldn’t have been. Yet networks and other businesses are often ill-prepared for similar contingency plans-whether an exit arises from retirement, illness, burnout, or simply the desire to move on to other projects.
Microsoft would have benefited from CBS’s approach when its former CEO Steve Ballmer stepped down. Instead, the corporate giant took months to announce Satya Nadella as successor, jeopardizing shareholder confidence, employee productivity and company profits.
Particularly for entrepreneurs, it’s all too easy to buy into the myth of being irreplaceable. While no one would suggest Letterman’s comedic style could be duplicated, the show is still preparing to go on, albeit in different form. If you don’t believe it can work, consider that “The Tonight Show”is enjoying a 60-year legacy despite former one-of-a-kind hosts Johnny Carson and Jay Leno.
Best known for playing a satirical political character, Colbert acknowledged his takeover of “The Late Show” by jesting, “I do not envy who they try to put in that chair,” because “Those are some really big shoes to fill-and some really big pants.”
We bet your shoes are just as big. Still, it’s important to consider how in your absence they might be filled, used or bought. The same goes for active partners and key employees. Starting the planning process years ahead will ensure you get the most from all you’ve invested into your company and that it continues to have a profitable future.
For a top 10 list of the best succession-planning steps to take, send us a message here. 
February 14, 2014
After announcing the departure of 33-year company veteran and CEO Steve Ballmer last August, Microsoft has only just declared his successor – Satya Nadella. While tech news insiders agree with the internal Bill Gates-like choice, the lack of a clear succession plan from the start, has left an indelible mark.
Ballmer held his position as CEO for the last 14 years, giving Microsoft more than a decade to develop a succession plan. Yet when the announcement was made that he would step down, not only was a successor not named but the timeline and process for finding his replacement was vague. This left the company open to commentary from all sides for potential candidates, and it created damaging uncertainty with investors. Months without a clear, singular vision for any company can also create political minefields, with people unsure of whose approval to attain due to divergent visions and others jockeying for positions in the senior ranks.
If all that alone wasn’t enough to create confusion, only two weeks after Ballmer’s noted departure Microsoft announced that it would be acquiring Nokia for $7.2 billion, the second-largest acquisition from the company behind Skype.
As we can see, even a large corporation with plenty of visionary leaders on its Board of Directors, including Bill Gates, can fumble on a succession plan. While the situation is unfortunate, it is far from uncommon. The reality is, and perhaps understandably so, planning your exit isn’t usually the most exciting task for a leader, but it is essential.
In what can be a harrowing process, many business leaders who doattempt to make a plan take on too many tasks by themselves. Others simply don’t start early enough to identify and prepare the right people for future roles. With so much at stake – both emotionally, financially and professionally – the key is simply to bite the bullet, start early, and be thorough. Doing so can create a smooth transition that keeps confidence strong among customers, investors, and employees. This confidence can play a major role in ensuring the success of your company’s future and enhancing your own personal legacy.

Archives