OWNER GOALS____________________________________________________________

How Can Business Owners Transfer Their Passion, Relationships, and Leadership?

BUSINESS GOALS____________________________________________________________

What is the Lower Middle Market?

Letter from PartnerINTRODUCING THESINGERLEWAK ACADEMY

OWNERGOALS

FAMILYGOALS

BUSINESSGOALS

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March/April2013

Contents

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2 INTRODUCING THE SINGERLE WAK ACADEMYSingerLewak is pleased to announce the SingerLewak Academy – an Executive Leadership Program.

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4 HOW CAN BUSINESS OWNERS TR ANSFER THE IR PASSION, REL AT IONSHIPS, AND LE ADERSHIP?In a previous letter David Krajanowski identified critical areas for successor education to assure business transfer to the next generation, including accounting, banking, human resources, insurance, and legal.

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6 WHAT IS THE LOWER MIDDLE MARKE T?Businesses that do more than $5 million a year in sales, often with more than 20 employees, have entered the lower middle market. It’s a major milestone in growing a company and a great place to be for business owners.

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INTRODUCING THE SINGERLEWAK ACADEMYBY DAVID KRAJANOWSKI | PARTNERdkrajanowski@singerlewak.com | 949.261.8600

SingerLewak is pleased to an-nounce the SingerLewak Acad-emy – an Executive Leadership Program.

OUR PART

SingerLewak Academy is a prac-tical, thought provoking program for Owners, Presidents, CEO’s, CFO’s, and other Key Executives of privately held companies, in all industries. We designed this program to build and/or enhance business acumen, skills, strate-gies and operational expertise in today’s changing environment.

Our Academy series is custom-ized to meet the needs of each geographic market we serve (Los Angeles, Orange County and Silicon Valley) and will be intro-duced to these business com-munities starting in May, 2013 with course offerings currently planned through January, 2014.

Our presenters will consist of a mix of industry experts, business specialists and SingerLewak pro-fessionals who will offer solutions and forward thinking strategies to optimize business strategies around five key areas: Financial

Health, Business Growth, Op-erational Excellence, Succession/Exit Strategy and Risk & Com-pliance.

The format includes a mixture of half day immersion workshops (with networking, lecture and one on one time or group dis-cussion), “after hours” specialty sessions and/or networking and coaching. Course materials will be provided for all participants. Course topics include:

•FinancialHealth: Topics will include tax strategies, key performance indicators, finan-cial statement fundamentals, Obamacare strategies, worker’s compensation solutions and other related topics.

•BusinessGrowth: Topics will include profitable growth alter-natives, where to set up shop, employee retention tools, and protecting your “assets”.

•Operational: Topics will include using I.T. for growth and protecting what you have and challenging your existing processes and infra-struction for new ideas.

•Succession/Exit: Topics will include strategies including recognizing the signs of corpo-rate divorce and when to seek counseling, proper sales process and addressing the hard ques-tion when succession involves the next generation.

•NextGenerationBootCamp: Topics will include the basics of Financing (accounting, banking, etc.), Risk & Com-pliance (human resources, insurance, etc.), Growth (sales

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We designed this program to build and/or enhance business acumen, skills,

strategies and operational expertise in today’s

changing environment.

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performance & management), Operational (I.T., manufac-turing, distribution & service efficiencies, organizational & process improvement, etc.) and the role of the next generation (responsibilities, expectations, accountability, etc.)

YOUR PART

When we meet with you over the next month to review financials and tax plans, we will be register-ing those clients and prospects that want to be involved in the process. We will be inquiring about your level of interest in the programs we have planned, as well as your interest in other top-

ics (our curriculum is flexible and based on your input).

SUMMARY

We look forward to the rollout of SingerLewak Academy and your involvement in the program.

We continue to strive to be the #1 firm serving your Entrepre-neurial & Family-Owned Busi-ness needs!

DAVID KRAJANOWSKI CAN BE REACHED AT

DKRAJANOWSKI@SINGERLEWAK.COM OR 949.261.8600

When we meet with you over the next month to review financials and tax plans, we will be

registering those clients and prospects that want to be involved in the process

HOW CAN BUSINESS OWNERS TRANSFERTHEIR PASSION, RELATIONSHIPS,AND LEADERSHIP?BY TERRY WHITE | SPECIAL CONTRIBUTORtwhite@ideatransfergrid.com | 714.614.6838

In a previous letter David Kra-janowski identified critical areas for successor education to as-sure business transfer to the next generation, including accounting, banking, human resources, in-surance, and legal. Now we turn

to softer issues—how to pass along their passion, relationships, and leadership.

PASSION

Entrepreneurs start with great ideas—innovations that trans-form the way people do things. For that we call them visionaries. However, their success is ulti-mately due to a passion to as-

semble the right people, the right systems, the right marketing, distribution, and service to bring the idea to customers.

So teach successors how all those components uniquely come to-gether to create the products and company that customers love. That represents the what’s and the how’s of the great idea. Now shift the focus to the why’s—the long value chain connecting people with the idea. When suc-cessors truly appreciate why-how-what, they get the passion, and they will invest it in developing their own ideas for the next level of success.

RELATIONSHIPS

A family-owned business rep-resents complex connections among people who add value to the enterprise. Foremost the relationship with customers, but the founder also establishes long productive relationships with employees, managers, executives, technicians, salespersons within the company. And surrounding the business is another network of relationships with suppliers, distributors, contractors, consul-tants, bankers, advisors, regula-tors, and even the lunch truck.

These relationships are not inher-itable—only earned. Founders need to get successors involved with all these people, learning why these relationships are valu-able, how to nurture them, and what their loss would cost the company.

LEADERSHIP

Is leadership teachable? Founders get trapped in no-win situations

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When successors truly appreciate why-how-

what, they get the passion, and they will invest it in

developing their own ideas for the next level of success

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TERRY WHITE CAN BE REACHED AT

TWHITE@IDEATRANSFERGRID.COM

when they put successors in a leadership role. First, successors know employees see the shadow of the founder behind them. When they make mistakes, hav-ing the founder step in doesn’t help. And when founders un-knowingly contradict successors with employees, they undermine leadership training irrevocably.

Instead, teach successors follow-ership. The ability to read people is critical to leadership, and founders invariably have great insights to share. Instead of prac-ticing to exert authority, make leadership a self-discovery of the sensitivity, insight, and resolve required to assume responsibility for other people.

THE CATCH

Entrepreneurs seldom make great teachers. The downside of their intense focus is impatience, and their self-confidence can bring kneejerk criticism. Plus, every family business carries emotional baggage and the potential of many “You always”-v-“You never” conflicts.

That’s why a succession coach sensitive to family and gen-erational cultures makes the transfer of this soft knowledge much more effective. Founders and successors need to express their concerns and feel they have been heard. A pair of impartial, empathetic ears can interpret the

words for productive insights and practical recommendations. Even more important is the outsider’s ability to accelerate succession with mutual agreements that track progress and enforce ac-countability.

Terry White co-founded IdeaT-ransfer over three decades ago to perfect communication links be-tween companies and customers, advisors and clients, managers and technicians, entrepreneurs and successors, presenters and audiences.

Visit www.ideatransfergrid.com

Businesses that do more than $5 million a year in sales, often with more than 20 employees, have entered the lower middle market. It’s a major milestone in growing a company and a great place to be for business owners. However, most people don’t realize how tough it is to get there and that the challenges moving forward are even more complex.

According to the Census Bureau of the 27 million businesses in the United States there are only about 300,000 with more than $5 million in sales. Of those there are only 150,000 businesses that man-age to do more than $10 million in sales. When a business enters the middle market there are three op-tions: you gain the skills to operate a scaling business, fall back to be-ing a traditional small business, or operate with management deficits and inefficiencies – a common cause of business failure.

As you navigate the lower middle market your business becomes more complex because you must manage your managers and chan-nel partners. Successful business owners in this space have learned to work through and with others. The better you can do this, the more successful your business will be.

My experiences have shown that leadership becomes even more critical as a business gains more revenue and employees. Own-ers are no longer able to manage by brute force, they learn to set standards and then to inspect to make sure standards are being met. They do this through systemized tools that include communicating the mission, values, management priorities, and establishing Key Performance Indicators (KPIs).

In 2001 when I took over leader-ship of my family’s company we were looking to grow the restaurant chain division. The division had fluctuated between 3 to 5 loca-tions with 30 employees and about $6 million in sales – solidly in the lower middle market.

As we added new restaurant loca-tions I became obsessed with the details, which are substantial in retail, and constantly harped on my mangers for every mistake. There was no margin for error and fear was the instrument of choice. Of course no one likes to work under those conditions and there was push back. Responsibility was avoided like the plague and I found the “monkeys” piling up on my back! This resulted in serious health issues are the ripe old age of 25. After a particularly poor week of health I had to make a change and

hired a management consultant to facilitate it.

The lesson learned was to trust and to allow managers to make mis-takes. Mistakes happen, but no one would admit they happened out of fear. As we grew I had to let others make decisions and then learn from their mistakes. The key was keeping the mistakes small enough that they didn’t sink the business. The better I got at allowing myself and others to learn from their mis-takes, the better my company per-formed. And the more I removed myself from day-to-day operations, the more I was able to focus on strategic issues. Some key com-ponents to that end were putting together a weekly dashboard that monitored KPIs, providing hon-est feedback in a non-threatening manner, and learning to effectively hold others accountable.

A great side effect of this is that cash flow often becomes more predictable. And that gives you the resource and forecasting ability to expand with confidence. This is also a critical component of acquir-ing more capital through banks and alternative sources that may not have been previously available.

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WHAT IS THE LOWER MIDDLE MARKET?BY ERIC C. SMART | SPECIAL CONTRIBUTOResmart@viceroyag.com | 949.533.0587

ERIC C. SMART CAN BE REACHED AT

ESMART@VICEROYAG.COM

S I N G E R L E W A K

ACADEMYE X E C U T I V E& B U S I N E S SL E A D E R S H I PP R O G R A M

MAY 2013 - JANUARY 2014LOS ANGELES

ORANGE COUNTY

The SingerLewak Academy is a practical program for Owners and Executives of Private companies in all industries — and is designed to build and enhance business acumen, skills, strategies and operational expertise.

Our Academy series has been customized to meet the needs of each geographic market and will be intro-duced to the business communities in Los Angeles, Orange County, and Silicon Valley throughout 2013. Each session presented by the SingerLewak Academy has been designed to fill the “knowledge gaps” experi-enced today by most business owners and executives.

Our team of presenters will consist of a mix of industry experts, business specialists and SingerLewak profes-sionals who will provide with solutions and forward thinking paradigms to optimize business strategies.

RISK & COMPLIANCE

FINANCIAL HEALTH

EXIT STRATEGIESSUCCESSION/

BUSINESS G

ROWTH

EXCE

LLEN

CEOP

ERAT

ION

AL

YOURBUSINESS

PLEASE CALL877.754.4557

OR E-MAILMARKETING@SINGERLEWAK.COM