Calm your employees' fears about how this crisis will affect the company, their
jobs and their retirement or other benefit plans. .... The case study family business
was a manufacturing company in the machine tool industry with several issues
for a board to .... The Pinnacle, Maumee, Ohio. Alan Robinson will speak about
his.
Tips and Trends in Turbulent Times The recent credit crisis is a reminder of the importance and benefits of having a sound business strategy that you can use to navigate through turbulent times. Many business owners were in contact with their CPA or other advisors for guidance in making financial decisions for the future. Below are some additional tips to help you assess your current financial condition and start rethinking your business plan to face the current economic challenges. 1. 2. 3. 4. 5. 6. 7. 8.
management practices. Are there opportunities to reduce your on-hand inventory? Service companies should make sure they’re capturing all their billable hours and invoicing promptly. Have you billed all of your contractual items? How about all of your pass-through expenses?
10. Consider ways to pass your increased costs (i.e., fuel expense) to your customers.
11. Develop a plan now to respond to declines in revenues before they actually It is more difficult to make sound decisions if you overreact. To get a better sense occur. Re-think your business strategies and update projections. Review your of where your business stands, begin by reviewing your cash position and product/service lines to identify the most profitable and determine how to anticipated cash needs. Are they in line with your business’s short-term needs, leverage for future growth in profits. goals and risk tolerance? 12. Contact your good customers. Even casual discussions can lead to new Take a fresh look at your monthly income and expenses. Have you been meeting opportunities. your budgeted projections? How much of a drop in revenues can your business withstand and for how long? What are your cash-flow needs for the next 30 to 13. Calm your employees’ fears about how this crisis will affect the company, their jobs and their retirement or other benefit plans. Speculation and gossip 90 days? Or 180 days? are counterproductive, so it’s better to address their concerns directly. Check with your lenders on the status of your credit lines. Are you in compliance with the terms? Will your bank renew their commitments at similar amounts, 14. Study what leading business owners and investors are doing and learn their strategies. rates and terms? If your credit lines are frozen or at their limits, consider meeting with vendors 15. Pick apart your business’ process chain and see where you can improve and working out a schedule of partial payments that would allow continued efficiency. delivery of critical materials and supplies. Finally, remain focused on your own advantages and strengths. Remember that: Eliminate your reliance on credit by disciplining your spending. • Small businesses have greater flexibility and can more easily adjust to changes in Refocus your efforts on your balance sheet. How much credit are you extending the economy than their larger counterparts. to your customers? Are you requiring deposits? Are there other policies you • Small business owners can use the recent crisis as an opportunity to refocus, assess and make their company more financially sound, disciplined and less should be changing? reliant on credit. Keep an eye on your accounts receivable. Watch for new patterns of slow payments and follow up immediately. Review your largest and riskiest accounts During tough times, it’s important to maintain communication with your CPA and to determine whether credit constraint or economic slowdown will affect their other advisors. Remember that you are not alone. Reach out to those who understand ability to pay you. your business and the challenges you face, and get help to navigate these turbulent Manage accounts payable more closely. Forfeiting early pay discounts may be times. Get help to gauge your current situation in the wake of recent market events more advantageous in preserving cash that may be needed for critical items. and create a sound business plan in response.
9. Analyze your expenses and determine which ones can be more readily controlled. Can you reduce spending in any areas to put less of a burden on your cash flow needs? Talk with staff about the need to tighten spending. Review inventory
Jeffrey S. Denning, CPA/ABV/CFF, directs the forensic and valuation services of Gilmore, Jasion & Mahler, Ltd.
Telephone: 419.530.4058 Fax: 419.530.8497 www.utfamilybusiness.org Center for Family Business College of Business Administration The University of Toledo 2801 W. Bancroft St. Toledo, Ohio 43606-3390 Toledo, OH Permit No. 161
U.S. POSTAGE PAID Non-Profit Organization
Celebrating 17 years of service to the family business community. A UT Center for Family Business publication serving the needs of family businesses by affecting more people more powerfully.
G E N E R AT I ON S succeeding
Volume 11, Issue 1 Winter 2009
succeeding
G E N E R AT I ON S Director’s Column by Debbe Skutch
We are experiencing very challenging times. A bit of historical perspective may be warranted.
UT Center for Family Business Hosts Annual Recognition Event
Family businesses are used to challenging times. When the Center honored twelve family businesses that were more than 100 years old, we asked them about the most difficult times their businesses had faced. They each had several disasters they had weathered, including fires, floods, wars, and weak economic times. In fact, many discussed how they had to reinvent themselves, tighten their belts, rebuild and hold their breath as they worked through their challenges. How businesses make it through tough times contributes to their legacy and their foundation of values. History and reputations are strong motivators to succeed. The family stories of ingenuity, creativity, perseverance and passion become family lore that spurs more of the same through the generations.
RESPECTING LEADERS IN FAMILY AND BUSINESS
Looking at the bigger picture, communities and nations, in fact even from a global perspective, people, countries and cultures have survived the worst of times. In order to survive, most everything changes. In most recent history, the pace has quickened, yet change and progress prevail in desperate circumstances. Family businesses are not operating the same way they did. Who is producing the same product or offering the same service they were offering 100 years ago, or even five years ago? After surviving a disaster, companies have improved and risen to greater heights.
Scott Gray, 6 Disciplines, and Kevin Sauder, Sauder Woodworking, celebrate with Julie Oswald, The Appliance Center.
The power of legacy and history in family businesses sometimes can hinder change and flexibility. We long to hang onto the past and the values. Maybe we can look at the challenges before us as the best reason of all to change and plan; in other words, professionalize. Necessity truly is the mother of invention. A lesson learned could be that strategic planning for change and improvement should not wait for challenging times. When all is said and done, family enterprise will prevail, it just won’t look exactly the same. However, values and legacy will be the foundation.
W
ith generous support from the James and Celia Findlay Fund, the Center hosted its 11th annual recognition event on November 11th. We were proud to recognize stellar leadership as we honored outgoing Advisory Board members, Chair, Ken Kuhlman and Julie Oswald. As we met at the Dana Center on UT’s Health Science Campus, veteran, new members and prospective members gathered to honor their peers and hear Niyi Taiwo, author of RESPECT, Gaining It and Sustaining It, speak about his research on leadership and respect. UT Trustee William Koester welcomed the large crowd as he shared the many recent successes of the University. Center Board leaders spoke glowingly about Ken’s chairmanship term and members of Julie’s long standing affinity group attended en mass to regale her accomplishments. Both Ken and Julie took some good hearted ribbing, all focusing on their true leadership skills.
Author Niyi Taiwo
Continuous improvement expert and online editor, Niyi Taiwo shared his vision of the power of respect in business and family. Noting three types of respect, human, positional and earned, Niyi defined each and shared how we live them daily. Focusing on leadership as two-way respect between the leader and those he or she influences to strive toward a common vision, he gave the audience much to think about and act upon. Thanks to all the family business leaders in the UT Center for Family Business. We cannot recognize you enough!
Ken Kuhlman, Kuhlman Corporation, accepts his recognition award.
The University of Toledo Center for Family Business Advisory Board Richard E. Buehrer, Ph.D. Edward H. Schmidt School of Professional Sales
Jake Harms Harms Flooring Center
Brian L. Laverty, Ph.D. Professor of Accounting
Charles Parcher Huntington Bank
Gary Sattler Cornell Supply Company
Jane Kervin NAMSA
Mark Meyer Shrader Tire & Oil
Tom Parseghian Power Brushes, Inc.
Steve Schult Gilmore, Jasion & Mahler, Ltd.
Thomas G. Gutteridge, Ph.D. Dean, College of Business Administration
Heidi Kopec Hirzel Canning Co. & Farms
Kurt Miller Northwood Industries
Tommy Pipatjarasgit Magic Wok
Dale Seymour Seymour & Associates/MassMutual
Frank Viviano Bartz Viviano Flowers & Gifts
Tasha Hussain Black Regional Growth Partnership
David Krock Eastman & Smith, Ltd.
Mark Moser Paramount Health Care
Malcolm Richards Supplemental Staffing
Thomas W. Sharkey, Ph.D. UTCFB Faculty Fellow
David Waterman Shumaker, Loop & Kendrick, LLP
James R. Findlay Sr. Findlay Business Partners
Monideepa Tarafdar, Ph.D. Professor of Information Operations and Technology Management Fred Treuhaft Plante Moran Financial Advisors
BA 977 1108 125C
succeeding
G E N E R AT I ON S
A Legacy of Giving
T
he UT Center for Family Business and the Toledo Community Foundation teamed up to present Susan Price, Vice President of the National Center for Family Philanthropy, at a luncheon at the Toledo Country Club on Oct. 7. Collaborating with the Toledo Community Foundation was a pleasure and benefit for our member participants. Keith Burwell, TCF President, spoke about the synergy between the organizations and the tremendous resources of community commitment that both groups represent.
Awards and Accomplishments In a recent article in an online publication, entitled “Get Thee to Graph Expo” which can be found at http:// members.whattheythink.com/evt/08/ graphexpo/081017romano.cfm You will find the following “They have built their business on new ideas. You will hear me say at the start of a seminar “All is right with the industry; the Metzgers are here.”
Price was previously a freelance writer for business associations and the mass media. Her articles have appeared in Working Mother, Family Life, and The Susan Price Washington Post. She is the author of The Giving Family: Raising our Children to Help Others and a frequent speaker to groups around the country on the subject of instilling philanthropic values in children. Price‘s talk focused on how families support and encourage generosity through family business, emphasizing how family business traditions, values and culture are the foundation for a giving legacy. It was duly noted that philanthropy does begin at home and in small amounts. Davie Waterman, Esq., partner in Shumaker, Loop & Kendrick, a Center sponsor, followed up Price’s comments with a brief discussion of how gifts of business interests to the Toledo Community Foundation can provide excellent tax advantages. If some or all of a family business interest is contributed to the Foundation, considerable financial resources will be available for charitable purposes at the lowest after-tax cost to the donor. One type of fund allows for the involvement of family members or other named individuals for many generations. The UT Center for Family Business looks forward to joining forces again with the Toledo Community Foundation.
Welcome New Center Members 2-Scale Holland, Ohio Archbold SuperValu Foods Archbold, Ohio Bakers Gas & Welding Supplies, Inc. Monroe, Michigan Continental Secret Service Bureau Toledo, Ohio Harvey Hohauser & Associates, LLC Troy, Michigan The Lyden Company Toledo, Ohio Modern Data, LLC Toledo, Ohio The Pursuit Group Toledo, Ohio Seagate Roofing & Foundation Services Toledo, Ohio
Bridget Holt, Keith Burwell, TCF, Susan Price, Debbie Skutch, Pam Wawrzyniak, UTCFFB.
The Importance of Boards of Directors in Family Business —How they Bring Value
E
veryone needs advice! How do we maximize the opportunity for good advice? That was the focus of the Center’s October forum on boards of directors and the value they have for families in business. Privately-held businesses most especially should take advantage of good counsel. There are many aspects of developing a powerful board so we decided to ask Peter A. Gold, Esq. of TheGoldGroup, LLC to develop a case study of a family business with a board and to create the agenda and issues for their board meeting. He did a wonderful job! The Center was proud of our member volunteers who served on the mock board taking on roles of those in the case study, as well as offering their diverse perspectives on their own boards of directors and advisory boards. Included on the insightful panel was Jane Kervin, NAMSA, Mike Hart, Hart Associates, Amy and Dan Miller, Ugly Data, Paul Clark, SFC Graphics, and Bob Pruger, The Rudolph Libbe Companies.
due to a law suit. The panel covered many bases from the hypothetical to their practical experience; fielding excellent audience questions, they expertly provided take away points for everyone. Gold brought his talent and years of experience as a consultant to family businesses and as an independent outside director of a family business. He also brought high level experience in higher education, government, and economic development. Please visit the Center’s website at www.utafmilybusiness.org to view the video of this presentation.
The case study family business was a manufacturing company in the machine tool industry with several issues for a board to address. From a changing industry, a need for greater marketing and sales, to family issues regarding ownership structure and succession, the all- family board had a lot on their plate. Specific agenda issues included reviewing financial reports, operation and sales forecasts, capital needs, compensation issues, transition and leadership development and liability exposure
Center Mission The University of Toledo Center for Family Business is dedicated to serving the unique needs of family businesses in northwest Ohio and southeast Michigan and to promoting greater incorporation of family business issues into curriculum and research at the University’s College of Business Administration.
Thank you to the UT Center For Family Business Sponsors
Affinity Groups meet for summer fling. Above, the Pitpatjarasgits, Richards and Campbells enjoy the mingling and fun hosted by their affinity group and members Walt and Lois Churchill. The food and networking was fabulous at Churchill’s Market.
Eastman & Smith Ltd. has a history of providing high-quality legal services suited to the diverse needs of its many regional and national business clients. The firm has an established reputation for providing professional, ethical and creative advice to business owners. The firm counsels clients in business succession planning, estate planning, tax, corporate, real estate, environmental, labor, litigation and immigration. Eastman & Smith Ltd. has more than 80 attorneys practicing in offices located in Toledo, Findlay and Columbus. For more information, contact David Krock at 419.247.1679 or visit www.eastmansmith.com.
Paramount Health Care, a locally owned subsidiary of ProMedica Health System, is a community-based health plan that works in collaboration with employers, individual members, physicians, health care providers and community and governmental agencies to improve the health of its members. Paramount Health Care, which serves 23 counties in northwest Ohio and southeast Michigan, is committed to providing comprehensive health care with unsurpassed levels of customer service, quality and cost effectiveness. For more information, call Jeff O’Connell at 419.887.2500.
Gilmore, Jasion & Mahler, LTD was founded in order to give area businesses a top-quality alternative to the national accounting firms and to provide every client with a high level of partner involvement and technical excellence. We offer a full range of accounting, auditing, tax and consulting services. GJM is affiliated with the RSM McGladrey Network, the fifth largest provider of audit, accounting, tax and consulting services in the United States, to provide access to an unmatched professional knowledge base. Today, our company is one of the largest CPA firms in the area with more than 60 associates providing personal attention, flexibility and innovative thinking. Contact Kevin Gilmore, CPA, CVA, at 419.794.2000 for more information. www.gjmltd.com
One of the first accounting and business service firms to offer personal financial planning, Plante Moran Financial Advisors (PMFA) is a trusted advisor to family business owners, helping them build, manage and preserve their wealth. Our integrated services include business succession, financial and estate planning, investment consulting, trust, insurance consulting and tax planning. Ranked the seventh largest asset management firm by Bloomberg’s Wealth Manager and named top financial planning firm by CPA Wealth Provider magazine, PMFA is an entity of Plante & Moran, PLLC, the nation’s 10th largest accounting and management-consulting form. For more information, visit www.plantemoran.com.
For more than 155 years, Massachusetts Mutual Life Insurance Company (MassMutual) has been in business to help customers achieve success. At year-end 2006, there were over $456 billion total assets under management. MassMutual has strong commitment to helping family businesses succeed for generations; sponsoring more than 50 family business centers located on major university and college campuses across the county. To help educate business owners, advisors use an interactive program, which refers to common mistakes that can destroy a business. No matter what your business or personal financial goals may be, we’ll help you get there! Contact Dale J. Seymour, MSM, CLU, ChFC, Certified Family Business Specialist at 419-893-9759. www.seymouragency.com. Assets under management includes assets and certain external investment funds managed by our subsidiaries. *Securities, investments advisory and financial planning services offered through registered representatives of MML Investors Services, Inc. Member SIPC. 1760 Manley Road, Maumee, OH 43537. 419-893-9759 . CRN200909-71468
Center sponsor Steve Schult and Bob Bobek, with Gilmore, Jaision and Mahler, and Jay Malcolm with Huntington Bank led more than 80 members through two fall Mini-Forums on Understanding your Financial Statements and Benchmarking and How Banks Use your Family Business Financial Statement. Both sessions in September and October were relevant and timely as the best and most up-to-date accounting and banking practices were discussed.
Sales in a Weak Economy was the popular topic for the November Mini-forum. Professor Jennifer Cordell, with the UT College of Business Administration Edward H. Schmidt School of Professional Sales led the session along with Center member, Roger Bostdorff of B2B SalesBoost, LLC. Results of a survey sent prior to the session were shared and discussed. This was truly an interactive Mini -Forum.
Shumaker, Loop & Kendrick, LLP is a full-service law firm of more than 175 lawyers practicing in Ohio, Florida and North Carolina. Our attorneys represent a broad spectrum of domestic and international business clients, as well as governmental and individual clients. Established in 1925 in Toledo, we are the largest legal firm in Northwest Ohio. For more information about the firm, contact David Waterman, Chairman of our Management Committee, at 419-321-1212 or
[email protected].
Huntington - NW West Ohio Region is a local bank with national resources, providing innovative retail and commercial financial products and services. Huntington also offers retail and commercial financial services online at huntington.com; through its technologically advanced, 24-hour telephone bank; and through its network of almost 1,400 ATMs. Huntington has more than 141 years of serving the financial needs of its customers with over 700 regional banking offices in Indiana, Kentucky, Michigan, Ohio, Pennsylvania, and West Virginia. For more information, contact Chuck Parcher at 419-249-4994. or visit www.huntington.com.
Center Families go Indoors for the Great Outdoors Upcoming Events Please mark you calendars for:
Fourth Annual Luncheon
Tuesday, February 3, 2009 11:30 a.m. The Pinnacle, Maumee, Ohio Alan Robinson will speak about his book titled, “Ideas are Free”
Economic Forecast Panel
Tuesday, March 10, 2009 5:00 p.m. The Toledo Club Belvedere Room Cosponsored with the UT College of Business Administration Alumni Affiliate Watch your e-mails for information on the continuation of the successful mini-forum series in the upcoming months. Visit our website at www.utfamilybusiness.org for information on the continuation of the successful mini-forum series in the upcoming months.
S
eptember was the month and The Cabela Retail and Family Business Experience was the forum for the Center’s bi-annual field trip to a family business. Many members brought their families to learn all about Cabela’s and their family business history and culture. They were greeted with some tasty adventurous treats, including elk, wild boar, ostrich and bison. Some regular cheese and crackers were also available while members networked and went on group tours of the store in Dundee Michigan. Families experienced entertaining and educational displays, a museum of quality trophy animals, and a walk through aquarium. There was still plenty of time for shopping and browsing. A buffet supper allowed members to share stories of outdoorsman proportion and network. Coffee and dessert was served while we learned more about Cabela’s as a family enterprise. As a non-family human resources executive, our presenter shared the legacy of Cabela’s beginning in
1961 at the kitchen table of Dick and Mary Cabela in Chappell, Nebraska. Soon, Jim Cabela joined the growing outdoor sporting goods business and by 1969, the kitchen table business had become a full scale sporting goods catalog operation, necessitating a move to neighboring Sidney Nebraska. The leading outdoor company in the world, Cabela’s values of customer service includes their commitment to employees, innovation, quality and value in their products and services. Perpetuating their culture is vital to their growth and legacy. The Center was pleased to learn about Cabela’s and have the opportunity to experience some of the best of what family business has to offer.
