The Entrepreneur’s Corner

Here’s an important question for busy business owners – what’s next for your company? Not just tomorrow or even in the months ahead, but when the time comes that you or one of your key employees retires or leaves the organization unexpectedly?

At a time when many baby boomers are thinking about retirement, those who own a business need to plan not just for their life after work, but for the future of the firm they’ve committed so much of their lives to. In a small- or mid-sized business, the owner and perhaps other key personnel play such a vital role that special planning is required to prepare for circumstances in which any of these individuals is no longer part of the organization. If your business doesn’t have a succession plan in place, it is an issue that needs prompt attention.

There are a number of questions to consider in helping prepare for the period of transition a company inevitably faces. They include:

• Who is in line to follow the principals of the firm? The most fundamental aspect of a succession plan is to have a replacement (or replacements) in line. In many cases, a family business will move from one generation to the next. In other situations, a trusted employee or group of employees may need to be groomed and prepared to assume control of the company in the future.

• How will control of the business be transferred? Once successors are identified, there are a variety of ways that control of the business can be transferred to them. Among the options are an outright sale to the new owner – either in a one-time transaction or an installment sale – or the use of a trust vehicle, such as a grantor retained annuity trust (GRAT) or a grantor retained unitrust (GRUT). Those are irrevocable trusts to which you transfer appreciating assets while retaining an income payment for a set period of time. At either the end of the payment period or your death, the assets in the trust pass to the other trust beneficiaries (the remainder beneficiaries). The value of the retained income is subtracted from the value of the property transferred to the trust (i.e., a share of the business), so if you live beyond the specified income period, the business may be transferred to the next generation at a reduced value for estate or gift tax purposes.

An important consideration in the decision-making process is potential tax ramifications, particularly for the seller. There are tools available to help reduce the potential impact of capital gains, estate and gift taxes when a sale occurs. Good planning plays a critical role in making sure that both the seller and the buyer achieve the most favorable results.

• What forms of protection are in place in case an unexpected event occurs? The need to implement a succession plan can sometimes strike without notice. Businesses that involve partners or likely successors, for example, may benefit from having a buy-sell agreement in place.

A buy-sell agreement lets you keep control of your interest until the occurrence of an event that the agreement specifies, such as your retirement, disability, or death. Other events, such as divorce, also can be included as triggering events under a buy-sell agreement. When the triggering event occurs, the buyer is obligated to buy your interest from you or your estate at the fair market value. The buyer can be a person, a group (such as co-owners), or the business itself. Price and sale terms are prearranged, which eliminates the need for a fire sale if you become ill or when you die. Remember, however, that you are bound under a buy-sell agreement.

Business succession is a complex matter. It involves close work with a financial advisor, tax specialist and an attorney experienced in these types of matters to structure a solution that is most suitable for your business and potential successors.

Justin R. Martin is an associate financial advisor with Ameriprise Financial Services, Inc. Contact him at (804) 320-3105 or .(JavaScript must be enabled to view this email address).
Bail Bonds Chesterfield VA

Preschoolers give pillows to families in need


A group of preschoolers from Chesterbrook Academy Preschool donated 56 pillows to local families in need at the Housing Families First shelter. The shelter is always in need of pillows and linens as, since families take the donated ones with them to their new homes.

Housing Families First provides shelter and support for homeless families and assist them in finding a permanent housing solution. The shelter serves people year-round, said Terri Iguina, operations and volunteer manager at Housing Families First. > Read more.

Dairy Queen’s Blizzard sales July 27 to benefit Children’s Hospital of Richmond


Dairy Queen’s 13th Annual Miracle Treat Day – Thursday, July 27 – will raise fund to benefit sick and injured children being treated at Children's Miracle Network hospitals throughout the United States. Locally, $1 or more from every Blizzard Treat sold at participating locations will be donated to the Children's Hospital of Richmond at VCU. Last year, the event raised more than $14,400 for the hospital. > Read more.

Crime Stoppers’ Crime of the Week: July 24, 2017


Crime Stoppers needs your help to find the person who struck a pedestrian in the City of Richmond.

On July 21 at 12:52 a.m., a woman was crossing the street at Forest Hill and Sheila Lane when she was struck by a dark colored four-door sedan that was traveling eastbound on Forest Hill. She was transported by ambulance to Chippenham Hospital for minor injuries and released. > Read more.

Henrico Police locate missing man

Henrico Police have located a missing 46-year-old Henrico man.

Police had reported Kevin William Cannelli missing this weekend, after he was last seen July 18. He was located safe in the Richmond area July 24. > Read more.

Business in brief


For the ninth year in a row, Puritan Cleaners is conducting a one-day-only community program that offers everyone in Richmond a free cleaning of one pair of pants. The event, called Free Pants Wednesday, will be held on Wednesday, Aug. 2. The offer is good at all 13 Puritan locations throughout the greater Richmond area with no strings attached. There are no minimums or other stipulations (other than suede and leather pants are excluded). This year, Puritan has partnered with the Richmond SPCA to help raise awareness for the Free Pants Wednesday program while also raising awareness for homeless kittens awaiting adoption at the Richmond SPCA’s humane center. The two organizations collaborated on a short movie which can be viewed at http://www.puritancleaners.com/community/free-pants-wednesday. This video is the latest in the light-hearted, low-budget, and intentionally campy videos associated with the Free Pants Wednesday program. Previous versions have featured racing at Richmond Raceway, ex-VCU basketball coach Shaka Smart, Todd “Parney” Parnell and the Flying Squirrels, and Bill Bevins and Shelly Perkins of Easy 100.9. > Read more.

Henrico Business Bulletin Board

July 2017
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Motorvators (formerly Flight Risk) will perform at 8 p.m. at The Tin Pan, 8982 Quioccasin Rd. This energetic rock band is comprised of experienced music industry veterans from the greater Richmond area. The band focuses their show on well-known classic rock songs – played at a comfortable volume – so you can rock out while still enjoying a conversation. Doors open at 6 p.m. Tickets are $10. For details, call 447-8189 or visit http://www.tinpanrva.com. Full text

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