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Loss, Leadership & Lessons: Must-Know Takeaways

At our recent Fireside Chat event, we had the privilege of hearing from Judy and Jeremy Hogel, the dynamic mother-son duo who lead MegaPros, a family business that faced unexpected challenges after the sudden loss of Joe Hogel, husband, father, and founder of the company. Moderated by Deanna Salo, this intimate conversation gave us a rare glimpse into their emotional journey and the leadership lessons they learned while navigating both personal grief and business challenges. Below are some key takeaways and memorable moments from the event that will resonate with anyone leading a family-owned business.

Key Takeaways:

1.    Succession Planning Is Non-Negotiable
  • The Gift of Preparedness. Joe Hogel left behind a handwritten letter “If I Died Yesterday” back in 2013, outlining what Judy and Jeremy needed to do in the event of his passing. This foresight helped the family stay organized and focus on moving forward, even when emotions were high. Judy later took inspiration from this and wrote her own letter for her loved ones, offering both emotional closure and a practical guide.

“The best gift I got from Joe was that letter… In my grief, I had a clear task list to follow. That was his final act of love.” – Judy

  • It’s more than just paperwork. Judy emphasized that while estate plans and succession documents are essential, regularly reviewing and updating them is just as important. These plans can’t just sit on a shelf – they need to be actively integrated into the family business structure.
2.    Lessons in Estate Planning
  • Funding Trusts Is Essential. Judy openly shared a major oversight they encountered: while their trust was well-written, none of their assets were titled under it, which forced them into probate. This is a common mistake, but an avoidable one with the right attention.

“We had the trust, everything was written in the trust, but nothing was funded. Nothing was titled in the trust. Which meant that I went to probate.” – Judy

  • Beneficiary Designations Matter. The Hogels learned the importance of properly designating beneficiaries for 401Ks, life insurance policies, and HSAs to keep assets outside of probate and reduce tax liabilities.

“Ask the question: If I died yesterday, what’s going to be the implications to my significant other? What kind of hoops are they going to have to jump through?” – Jeremy

3.    Invest in the Right Advisors Early

Jeremy shared candid insights about the mistakes they made during the transition period. One key mistake was not hiring the right advisors early enough: “There was no way Joe was going to spend money on something like succession planning,” Jeremy said, acknowledging their initial hesitation to invest in professionals with the necessary expertise.

He also emphasized that cutting corners when it comes to hiring expert advisors was one of their biggest mistakes. “You get what you pay for. Not hiring the right people for big things was one of our biggest mistakes.” – Jeremy.

Jeremy praised the EFBC’s network of advisors – Strategic Partners, describing them as “the crème de la crème,” and encouraged others in the room to tap into this invaluable resource early on.

4.    Leadership Must Be Clearly Defined

While Joe had been preparing Jeremy to step into a leadership role, it became clear after his passing that there needed to be more formal communication about leadership succession within the company. Jeremy noted that while the team knew he would take over, having clear documentation of leadership responsibilities is crucial to avoid confusion.

“Joe was preparing me, but we didn’t have everything formalized. Now I understand the need for clarity in leadership transitions.” – Jeremy

5.    Adapting Company Benefits

Learning from Joe’s death, MegaPros quickly amended their policies, such as increasing life insurance for employees and adjusting profit-sharing plans to ensure that if an employee passes away, their family would receive their share of profits.

6.    Balancing Emotion and Business

Jeremy reflected on how challenging it is to separate emotion from business, especially in a family business setting. MegaPros initially leaned heavily on numbers and metrics, but after Joe’s passing Jeremy soon recognized the need to prioritize the human side as well to truly uphold their culture

“It’s not just about numbers. If you’re not good, the business isn’t good. We have to figure out the people part first, then the money will follow.” – Jeremy

7.    The Power of Community in Times of Crisis

When tragedy struck, the EFBC community rallied around Judy and Jeremy, providing both emotional and practical support. From peers reaching out to help with daily tasks to friends offering a listening ear, this sense of belonging made a critical difference during their darkest moments.

“The people in this room, the people of the EFBC, started as just a group of folks who wanted to learn… but over time, they became lifelong friends and family – people who showed up for us in our hardest moments.”– Jeremy

The Hogels’ journey after Joe’s sudden passing serves as a powerful reminder of the importance of succession planning, community support, and financial resilience. Their story shows how a family business can not only survive but thrive in the face of tragedy, as long as the right foundations are in place. Plan for the unexpected, surround yourself with the right advisors, build financial resilience, and lead with both your head and your heart.

For those who couldn’t attend, we hope these key takeaways provide valuable insights you can apply to your own journey as a business owner or entrepreneur.

Save the Date: We’ll continue this Fireside Chat series on December 11, 2024 – virtual Fireside Chat “From A Minute to Think to Leading the Way” featuring Julie Funt, a renowned keynote speaker, who will share insights on leadership, productivity and well-being; and February 13, 2025 – fireside chat focusing on mergers and acquisitions (M&A), featuring our members Jim Flanagan and Mark Wesa. Don’t miss out!

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Essential Steps to Ensure a Smooth Generational Transfer

 

Is It Time to Start Thinking About Your Legacy? 

Picture this: You’ve built a successful business, pouring your blood, sweat, and tears into making it thrive. Now, as you approach retirement, you’re thinking about what comes next—not just for you, but for the business you’ve spent years cultivating. The challenge? Ensuring a smooth generational transfer that protects your legacy while preparing the next generation to take the reins.

If this sounds familiar, you’re not alone. In the United States, over 51% of business owners are over the age of 55 and grappling with the same question: how do you ensure your life’s work continues successfully without you at the helm? The good news is that by taking proactive steps, you can ensure your business thrives for years to come. And remember—it’s never too early to start planning.

Whether you’re just a few years from retirement or thinking ahead for the long term, starting the planning process early provides flexibility and peace of mind. Succession planning isn’t something that can be rushed, and by giving yourself time, you’ll have the opportunity to avoid common pitfalls, like those seen in family dramas on TV, while laying the groundwork for a smooth transition.

Here are 6 essential steps to help you plan for a successful generational transfer:

  1. Start by Identifying and Training a Successor

The most critical step in any generational transfer is choosing the right successor. Begin by identifying potential candidates early on—whether from within the family or among trusted employees. Consider multiple options and set clear criteria for their development and eventual promotion. This gives you the opportunity to observe their growth, test their leadership capabilities, and make the most informed decision.

Once you have your successor, communicate the choice to your team and, most importantly, your customers. Your support and endorsement will help transfer the relationships and trust you’ve built over the years. Train your successor by giving them responsibilities gradually, allowing them to step into their leadership role while you’re still available to guide and mentor them.

It’s also important to remember that even if retirement seems far off, it’s beneficial to identify future leaders early. Doing so ensures a seamless transition when the time comes.

  1. Preserve Vision and Values Through Mentorship

Ensuring your successor maintains the core vision and values of your business is essential for continuity. By the time you’re transitioning out, your team should already embody these principles, but explicitly mentoring your successor is critical. Walk them through how you made decisions that aligned with the company’s mission, how you built a culture around these values, and how you communicated them to clients, employees, and stakeholders.

Instilling this wisdom ensures that the business remains consistent with its foundational principles while still allowing for new leadership to adapt and evolve as necessary.

  1. Communicate Clearly and Consistently

Communication is often the linchpin of a successful succession. “The biggest red flag that the succession will not go well is lack of communication,”says Mary Beth McLean of Private Vista. Clear and consistent communication helps build trust and ensures that everyone involved understands their role, expectations, and the overall plan. Without transparency, misunderstandings and mistrust can derail even the most carefully planned transition.

Develop a comprehensive communication strategy that involves all stakeholders—employees, customers, vendors, and family members. Regular updates on progress, clear timelines, and addressing concerns as they arise will go a long way in ensuring the success of the generational transfer. Open communication helps mitigate potential conflicts and ensures smoother transitions.

  1. Develop Team Talent with Strong Training Programs

A successful generational transfer requires more than just a well-trained successor—it also requires a strong and capable team. Review and improve your company’s development and training programs, ensuring they align with the future direction of the business. Work with your successor to develop these programs, ensuring they cultivate not only leadership skills but also the values and vision that define your business.

This step provides your successor with hands-on experience while also preparing the broader team for a seamless transition. Your successor’s ability to lead will depend heavily on their support from a well-trained, motivated team.

  1. Ensure Financial Stability by Establishing a Liquidity and Equity Plan

Generational transfers often come with financial complexities, especially in businesses where shares are closely held within a family or a small investor group. You need to have a clear plan for converting your ownership into equity that can be transferred, ensuring the business remains financially stable during the transition. This step is akin to creating a business “will.”

Additionally, make sure to account for tax implications that may arise during the transfer. Consult with tax advisors and legal professionals to minimize liabilities and ensure the transition is legally compliant. By proactively planning for liquidity and equity, you set your successor and your business up for financial success.

  1. Embrace Life After Ownership

The final step is perhaps the hardest—letting go. Trusting someone else with the business you’ve built can be daunting, but if you’ve followed the steps above, you’ve set your successor and your business up for success. Now, it’s time to enjoy the fruits of your labor and take pride in the legacy you’ve built.

EFBC’s Role in Supporting Generational Transfer

At the Entrepreneur and Family Business Council (EFBC), we understand the complexities of generational transfers. We offer a variety of resources, including the Transition Preparation Assessment (TPA), designed to help businesses navigate the transition process. The TPA assesses leadership, succession planning, financial health, and operational efficiency, providing a roadmap for a successful transfer.

EFBC also connects businesses with Strategic Partners across key areas like accounting, legal, banking, and wealth management to ensure every aspect of the transition is covered. By leveraging their expertise, you can increase your chances of a smooth and successful generational transfer, safeguarding your legacy for years to come. To learn more about the common pitfalls to avoid during your succession planning process, check out our blog: “Avoid These 5 Common Pitfalls During Your Succession Planning Process When Looking to Extract Value from Your Company.”

Conclusion

A well-planned generational transfer ensures that your business not only survives but thrives under new leadership. By taking the time to identify a successor, preserve your values, develop your team, communicate clearly, and ensure financial stability, you can secure your legacy for future generations.

The time to start planning is now—and remember, it’s never too early to start. Are you ready to take the first step?

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Avoid These 5 Common Pitfalls During Your Succession Planning Process When Looking to Extract Value from Your Company

So, you’re a fan of “Succession” on HBO? Us too, purely for the entertainment! We never want to see a family business go through the drama that the Roy’s portray as they exhibit all the dangers of not having a succession planning process. Even though it can be daunting to try and answer, “What’s your number?” when it’s tied to both the value of your business and the amount you are seeking to extract after the sale or transition, there is no more important question for a business owner to decide. Luckily for us, our Strategic Partners have five pitfalls you can make sure to avoid during your succession planning process to not end up like the Roy’s!

“It’s hard to boil it down to one red flag but a common theme is a lack of trust. Perhaps the exiting party doesn’t trust the newcomer with certain information that will be critical to know as the business moves forward. Or the newcomer has his/her own ideas and doesn’t trust or acknowledge the expertise and experiences shared by the exiting party. A lack of trust amongst the major players will usually be a sign that significant hurdles are already in play even before the succession takes place.” – Karen Snodgrass, CPA, MBA, Principal at Cray Kaiser Ltd.

“The biggest red flag that the succession will not go well is lack of communication. There needs to be consistent, clear and candid discussions about the expectations and desired outcomes for all parties. It never works if we assume that we know what the other party is thinking!” – Mary Beth McLean CFP, MBA, Partner at Private Vista

“The first red flag we look for in the succession planning process is there being no buy-sell agreement in place to allow a non-participating family member to gracefully exit the business.” – Rachel Bossard, JD, Partner at Burke, Warren, MacKay & Serritella, P.C.

“Most often, we see business owners starting too late and not involving their entire team of advisors. If you make decisions in a vacuum and don’t discuss how they impact your goals for the next phase of life for you and your loved ones, you may take steps that don’t set you up in the best way. Knowing your number is one piece. Knowing what you are moving towards is equally important. How will you fill the day once you are not running your company? What will be your identity? Your purpose?” – Nicole Romito, CFP, CDFA, Partner at Private Vista

“From my experience, communication is the name of the game! Expectations are built off of information and information becomes relevant through communication. When we see a company whose ownership has a high level of communication and information sharing, the succession process will likely have more traction. Also, understanding that succession is not only a plan or a document but also a journey that will have a number of bends and discomfort along the way. A solid footing in ownership communication can smooth out many of these challenges. – Deanna Salo, CPA, Managing Principal at Cray Kaiser Ltd.