If the adage is true that knowledge is power (and we think it is)—we can guarantee you will walk away empowered by our May 6^th broadcast.

A few weeks ago Ray Pagano and Gary Anderson told a story about a very happy ending to Ray’s exit strategy for his family-business.  But that is not always the case.  Especially not in this economy—-but the picture is not as bleak as you might imagine.

Our guest on Thursday, Mark Dayman of Cap-Val LLC, will share his expertise as we discuss how to develop multiple exit strategy options.  With his guidance, you will learn how to have more control of your exit, will better understand the factors that drive value and price, and will learn how to reduce your risk—all from the perspective of a business valuation expert.

Listen live at 1:00pm on Thursday May 6th–or if you can’t be with us then–you will be able to download the full broadcast  on this site after the show airs.

Mark is a Partner in the Atlanta office of CapVal – American Business Appraisers, LLC, and a Managing Director of The McLean Group, LLC Investment Bankers.    For many years he was the Managing Shareholder of Dayman Lurie & Goldsbury (DLG), a New England affiliate of BDO Seidman LP.  Mark has over 30 years of experience in enterprise appraisals and pricing, capital formation, franchising, and transactions.

Mark’s appraisal experience focuses on exit strategies and enterprise pricing, estates and trusts, and Fair Value.  He also uses these skills in litigation support and forensics, and he is a qualified expert in litigation matters in Federal, Bankruptcy and various state courts.  Mark is Accredited in Business Valuation (ABV) and Certified in Financial Forensics (CFF) by the American Institute of Certified Public Accountants, and is a Certified Valuation Analyst (CVA) accredited by the National Association of Certified Valuation Analysts.  Mark is also a member of the American Society of Appraisers, the Institute of Business Appraisers, and the Vermont and Georgia Societies of CPAs.

In his capacity as a licensed investment banker, Mark has worked on transactions involving the sale of businesses in a number of industries with prices as high as $135 million.  His capital formation skills also extend to various forms of debt, as well as the use of franchising to form capital.  He holds Series 62 and 63 securities licenses.

A graduate of the University of Vermont, Mark is a frequent guest speaker to various user groups on matters of value, pricing, value enhancement, exit strategy, M&A, and franchising.  While speaking venues often include related professional associations and bar associations, he is increasingly asked to speak at franchisor corporate events and annual franchise conferences to help focus attention on franchisee exit strategies to preserve continuity in brands.  Mark is a member of the Board of Directors of the Southeast Franchise Association.

Mark A. Dayman, CPA/ABV/CFF, CVA, CapVal-American Business Appraisers, LLC, The McLean Group LLC Investment Bankers, 3525 Piedmont Rd  BLDG 7  STE 300   Atlanta, GA  30305  Telephone: 678-431-0775  Email: mdayman@capval-llc.com

Sunset Family Business Radio

Recap: Taking Your Family Business Global

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On Thursday, April Family Business Radio hosts Meredith Moore and Pat Romboletti were happy to welcome this week’s guests—Erick Papp, international executive for 28 years, and Richard Bennett, business and corporate law attorney with Kitchens Kelley Gaynes, PC.

The big take-away from this week’s discussion was that the seemingly treacherous waters of global business begins and ends with one’s own assumptions about the way things should be. Before venturing onto the global stage, you really need to be open to different, sometimes radically different, perspectives.

This insight first emerged when Erick talked about his stint in Ecuador as the manager of a banana plantation. In this capacity, he was actually responsible for a broad range of duties, across all functions, so that he was, in fact, fulfilling the role of what we would call in the States a CEO/COO. As Richard quickly pointed out, in different countries, titles mean different things, something that is true of a whole host of concepts. It is the wise business owner who scopes out as many of these differences as possible—and continues to stay alert to learning the local customs along the way.

Erick and Richard also discussed tax issues as relates to international business. Erick began by pointing out the big similarity—that is, all governments try to take as much money in taxes as they can. Sad, but true, across all cultures and countries. From there, though, taxation morphs into a thousand variations. For instance, in Ecuador, a manager is personally and legally liable for any discrepancies in the company’s taxes. Also, taxes are paid in advance in Ecuador.

Between the two of them, our guests developed a quick list of questions for business owners to address—before opening shop outside the U.S.:

• Does it make sense to expand internationally?

• If so, how is the best way to accomplish that?

• Should the expansion be done in large leaps or baby steps?

• What is the best way to structure the international business—as a subsidiary, joint venture, co-owned subsidiary, etc.? Is local ownership required?

• Who are the trusted advisors, both domestic and international, that are needed to help with the expansion?

As always, the complete podcast, including tips from our pros, is available as a download. Please take advantage of our guests’ expertise and knowledge in this exciting area of international trade and manufacturing. Especially as relates to this last bit of wisdom: The behavior of people in another culture may not—probably won’t—conform to your expectations.

Erick Papp, Telephone:  678-446-2055  Email:  egpapps@gmail.com

Richard Bennett, Attorney at Law, Kitchens Kelly Gaynes, P.C. – Telephone: 404-364-6630  Email: rbennett@kkgpc.com

Running a family business in the United States has its challenges, but things get very interesting when you also have family holdings and business entities outside of our borders.  There are many things to think about, from understanding the culture and customs to making sure that you have good financial and legal advisors who understand the laws and regulations where you are operating.

Our guests today both know this topic well and will be able to share valuable insights that can help you avoid costly mistakes if you decide that it’s time to take your family business global.

OUR GUESTS:  Eric Papp and Richard Bennett

Erick Papp is a Senior Executive with broad international management and operational skills. He has over twenty years experience running family owned businesses with full P&L and general management responsibilities.  He has led acquisitions, turnarounds, mergers, joint ventures and start-ups in a broad bandwidth of industries.  He has been directly involved in all the stages of growth and development of family owned businesses.  He has a proven track record of driving profitability through productivity, revenue increases and cost control.   As CEO of several organizations he has developed proactive working relationships with owners, board members, lenders, customers, vendors, and other personnel critical to overcoming the challenges particular to family owned businesses operating in the global market.

Born in Honduras, Erick lived half of his growing years in the Philippines and the United States.  He graduated from high school in Germantown, Tennessee. In 1981, after graduating from the Georgia Institute of Technology with a Bachelor of Civil Engineering he moved to Ecuador.  He began his professional career as a civil engineer in the petroleum industry.  Later he became an executive holding various management positions in multiple industries. Erick’s approach to diversity in the workplace and the global market has been positively influenced by his exposure to diverse cultures and environments.  He is fluent in English and Spanish.

Last year, in what has been his most daunting endeavor yet, he moved with his wife Sandra and their three sons to the United States.  He currently calls Alpharetta, Georgia home.

Erick Papp, Telephone: 678-446-2055 Email: egpapps@gmail.com

Richard H. Bennett is a shareholder with the law firm of Kitchens Kelley Gaynes, P.C., in Atlanta, Georgia. He joined the firm in 1998, and he practices primarily in the areas of corporate law, business transactions, and estate planning.

Mr. Bennett has lectured on the topics of business start-ups, business strategies, restrictive covenants, LLC operating agreements, Wills, and family limited partnerships. He is a member of State Bar of Georgia (Technology Section), the American Bar Association (Business Law Section; Real Property, Probate and Trust Section), and the Atlanta Bar Association.

Mr. Bennett earned his J.D. degree, cum laude, from the University of Georgia, his M.B.A. degree from the University of Georgia, and his B.A. degree from Emory University.

Richard H. Bennett, Attorney at Law, Kitchens Kelley Gaynes, P.C. – Telephone: 404-364-6630 Email: rbennett@kkgpc.com

Sunset Family Business Radio

Recap: How One Family-Business Owner Maximized the Multiples With the Help of Trusted Advisors

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Now that Family Business Radio has broadcast nearly a dozen interviews (all available for download here), one undeniable fact has emerged from our weekly conversations: there is no one personality type that goes out, starts a business and makes a success of it. This observation holds up as hosts Meredith Moore and Pat Romboletti welcome this week’s guests—Ray Pagano, founder of VideoAlarm, who sold his 33-year-old business in 2009 to a Fortune 100 company and Gary Anderson, who currently serves as Chair for three executive groups with Vistage, the world’s foremost CEO leadership organization.

Ray followed his own individualistic and thoughtful route to entrepreneurial achievement. Along the way, he gives credit to a host of people for helping him make his dream come true, including Gary, who advised Ray in the sell process, a journey that took many twists and turns, much planning and preparation.

VideoAlarm experienced slow early growth. (In fact, it sounded like during those early days, the most valuable employee was the shop dog!) The company was developing new technology and Ray ran into his share of nay-sayers. But “I didn’t know enough and being stubborn, I carried on,” he said.

Over time, the business flourished. When it became evident that no family members were going to take over the business, Ray turned to Vistage for personal and professional connections, outlets and advice. “They were an amazing help to the company and to me,” he said.

From his vantage point, Gary has seen the ups and downs, overs and unders of family-owned businesses, CEOs and key employees. He cited the four cycles of the typical family business:

• Blunder. Where the founder stumbles along, trying to figure out what’s next.

• Wonder. When you have a steady stream of months when you make the payroll (wow!), when you get your first line of credit (wow!).

• Thunder. The years where the company gains real traction, the years of making money and having fun.

• Plunder. This is the point when the entrepreneur is less willing to take risk, when the pilot light of the company gets dim or goes out altogether. Gary said, “This is the point where you need to re-calibrate or sell.”

Gary also pointed out that it’s an important step for the founder/entrepreneur to move from quarterback to coach and it usually happens “when 24 hours is just not enough time to get everything done.” He encourages his clients to delegate, to quit measuring employees’ behavior and instead focus on outcome. He tells them, “People will do things differently than you, but if a project gets done, is on time and on budget—then that’s OK.”

Once Ray made the decision to sell VideoAlarm, a fascinating seven-year story started to unfold. Upon the advice of his Vistage group, Ray issued phantom stock to his employees, telling them that the company was worth X and if they stayed with him and stayed productive, then they would get any appreciation from then until the time that the business sold. Additionally, he started monthly meetings with employees to educate them on the balance sheet and other aspects of ownership. And he initiated an outreach to the families of employees, sending out newsletters and hosting product demonstrations for them. In other words, he took serious steps to get serious buy-in.

Next came the ramp-up. Once again, Ray heeded the wisdom of trusted advisors. He gathered his supervisors at a three-day, off-site conference to develop the next steps for the company. The employees also got to air their grievances. “I really took a beating. A lot of hidden agendas got flushed out,” he confessed. But in the end, they walked out with 30 projects to be implemented and managed by the employees—not by Ray. It took five years, but the company grew and thrived. Ray said, “It was an amazing transformation from the first meeting to the end of that five-year period.”

When it came time to actively start looking for buyers, Ray was coached by his Vistage group to avoid getting caught up in the fever of the hunt. They urged him to stay focused on growing the business. “They pointed out that buyers actually want you to get distracted by the sell process because, if your business falls off, then they can get a better price,” Ray said.

By this time, the economy had crashed, but still VideoAlarm was able to get the deal done. The day before he signed the papers, Ray called his employees together and held up that long-ago phantom stock certificate—“do you remember this?” Needless to say, he made some people very happy that day. (One assembly-line employee used her bonus money to build a home for her mother in Mexico.) “It was a good way to do it,” Ray said modestly, “They helped me attain my dream for all those years, so they deserved it.”

Gary concluded by recommending a book that closely parallels Ray’s approach, “The Great Game of Business” by Jack Stack.

Please download our podcast and get the hour-long discussion with Ray and Gary. You are guaranteed to have plenty of “Aha!” and “Why didn’t I think if that?” moments. As Gary so succinctly put it, “One of us isn’t as smart as all of us.”

Gary Anderson, Master Chair, Vistage – Telephone: 404-520-0069 Email: gary.anderson@vistage.com

Ray Pagano, Founder, VideoAlarm

In an earlier broadcast (see archives for February 25th) our guest emphasized the importance of planning and preparing long before the time that you decide to sell your business.  Our guests on Thursday, April 22nd will tell a story that attests to the wisdom of that advice.

When Ray Pagano, Founder, VideoAlarm, decided that it was time to sell the family-business that he launched in 1976, he put a number of steps in motion to ensure that it would be a successful sale.  He also made sure that his loyal employees who had helped him grow the business benefited from the sale.

One of the first steps Ray took was to turn to Gary Anderson, Chair of Vistage International.  Gary had served as Ray’s trusted advisor through the Vistage, the worlds foremost CEO leadership organization.  With Gary’s guidance, Ray’s passion for doing the right thing, and with the help of other trusted advisors, Ray sold his business in 2009 to a Fortune 100 company (who says there are no deals being done).

You will hear all the highlights at 1:00pm tomorrow, and we guarantee you that Gary and Ray will share insights that you can use the minute the show ends.  We look forward to sharing this hour with you.

Our Guests

Gary Anderson’s earlier career includes senior-level positions with IBM, Honeywell, Coopers & Lybrand and Fulton Federal Savings & Loan. I founded and managed (for 17 years) Anderson & Watson, an executive search firm.

He currently serves as Chair for three Vistage groups—two Chief Executive groups and one Key Executive group.  Gary has the designation of Vistage “Master Chair”—marking a record of distinction in service to Vistage members.

Members of my groups are leaders in a wide array of industries, including engineering, consulting, banking, insurance, law, accounting, construction, building materials, fencing, printing, process automation, restaurants, psychology, landscape design, bus and car dealerships, software, HVAC, office furniture, surveillance camera manufacturing and warehousing.

Gary Anderson, Vistage International, Telephone: 404-520-0069

Ray Pagano was raised in New York City and received a BS degree from Eastern Kentucky University.  In 1974 he settled in Atlanta with his family and after a failed partnership started his own business in 1976 manufacturing an outdoor surveillance camera housing which he had patented.

During the next 33 years, Videolarm Inc. grew under his leadership with manufacturing facilities in the US and China.  Since no member of his family had an interest in Videolarm, Ray began planning to sell the company.  After 7 years of carefully executing his exit strategy, he successfully sold the business in 2009.  He has already started to write the next chapter of his entrepreneurial life as he builds a new business that incorporates his love for boating (listen to our show to learn more about Ray’s next venture).

Ray Pagano, Founder, Videoalarm, Inc.

Sunset Family Business Radio

Recap:How Deli Provision Co., Inc. Preserved a Fourth-Generation Brand

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The show on Thursday, April 15th offered a penetrating discussion on the topic of expanding a business while retaining the brand and culture.  Our guest, Stan Epperson, founder of Deli Provision Co., Inc., joined Family Business Radio and hosts Meredith Moore and Pat Romboletti to tell us about his business, its growth and to share his experience with preserving a brand.

Stan started his business in1981—launching Deli Provision as the first independent distributor in Atlanta for Boar’s Head Provisions, a fourth generation family-owned business founded in New York City in 1905.  Stan credits his success over the last 29 year by aligning with Boar’s Head’s creed: Sell only superior quality delicatessen products—no compromise.

The ability to expand without jeopardizing the values that are at the heart of a family business is tricky terrain. Stan credited Boar’s Head with maintaining its original stance—that the independent distributors are customers. Customers get treated differently than channels of distribution, a huge distinction to Stan’s mind. He also pointed out that, in making your company valuable for any future sale, “profit follows. It does not lead. Success follows. It does not lead. There are no tricks, no magic formulas. A business becomes more valuable as you do the same thing for the last customer as you did for the first customer. Which is also more difficult.”

Stan shared a great story that really brought home the fact that Boar’s Head was committed to maintaining the values of the founder.  Since the beginning, when all delivery trucks were based in New York, Boar’s Head has insisted on gold-leaf lettering on delivery trucks—even after they expanded nationally with their independent distributor network.  The process could only be done in New York City and required Stan to ship his trucks to NYC and arrange for delivery back to Atlanta.  An expensive and time consuming process.

During a visit to Atlanta by Bob Martin, CEO and the grandson of the Boar’s Head founder, Stan complained to him about how crazy, expensive and inefficient it was to go to all that trouble for the delivery trucks—“…surely we could get some decals that would be almost as good.” Mr. Martin paused a second and then replied, “When you let me make roast beef that’s almost as good, then I’ll let you paint trucks that are almost as good.” Stan said (with a laugh and, I swear, you can see him shaking his head even on the radio), “That brought the conversation to a screeching halt.”

Philanthropy is another passion of Stan’s family. After losing their son to a brain tumor in 2001, the Epperson family has poured their energy and money into funding various groups who are searching for a cure. “We don’t want another family to have to go through this,” he said. They also set up The Epperson Family Foundation as a multi-generational tool to help in this area.  Stan was clear about philanthropy—in the beginning of a business, your focus needs to be on making that business a success. But once you’ve crossed a subtle line, then he firmly believes that you need to give back to your community.

He admitted that setting up a foundation was a bit daunting, but “we got professionals to help us.”  In his own words, he avoided the problem that afflicts so many entrepreneurs—the “I can do anything” syndrome. Instead, he turned to a team of trusted advisors, including his CPA, lawyer and financial planners, to develop a coordinated approach.

By the way, for all you entrepreneurs out there who are just beginning to get your business off the ground—take heart. 29 years ago when he first started, Stan literally lived in the back room of his warehouse while his family stayed in New York. For shower facilities, he used the 24-hours gym down the street. But piece by piece, account by account, day by day, he built his company. As of this May, he is selling the last piece of his business—the 16th! His next venture? “I’m becoming very good at being a goof-off.” (A statement that is only partially true since he plans to channel his considerable energy into the family foundation.)

You can download our podcast and get the entire discussion with Stan. His blend of humor, candor and humility will inspire you. While he is clear that doing the simple things, like sticking to the core values of your family and business, is hard, he is equally clear that they are worth it.

Stan Epperson, Deli Provision Co. Inc., 6925 Discovery Blvd. Mableton, GA Telephone 770-948-9494

Boar’s Head Provisions is a fourth generation family-owned business that began in New York City in 1905.  The founder, Frank Brunckhorst, had a very simple philosophy back then—-sell only superior quality delicatessen products—no compromise.  While competitors, faced with the challenges of rapidly expanding distribution, have compromised on their standards over time, Boar’s Head never has.

Key to the family strategy of careful expansion that holds to the roots of Frank Brunckhorst’s vision is their use of independent distributor’s such our guest on Thursday, April 15, Stan Epperson, Founder of Deli Provision Co. Inc. Stan launched his business in 1981 and, working closely with Frank’s descendants, has continued to uphold the high Boar’s Head standards as he has grown his business in the Atlanta region over the past 29 years.

Stan will share the rich history of Boar’s Head and the history of his own successful business, Deli Provision Co. Inc. There is much to learn about how to expand without jeopardizing the values that are at the heart of a family-business.

But Stan’s story doesn’t stop there.  After pouring himself into building Deli Provision Co, Inc, he has followed another passion that will be carried on by the next generation of Stan’s family—philanthropy.   Just as in building a business, creating a legacy through philanthropy can be fraught with pitfalls, so we have asked Stan to share the wisdom that he has gained along the way.

Rich history, successful expansion, uncompromising values and leaving a legacy are all covered in our show with Stan and you won’t want to miss a bit of it.

Our guest:

Stan Epperson graduated from Butler University in 1971 with a degree in Business Administration.  He then started his work career with Oscar Mayer and Co. in sales in Indianapolis, IN.  Over the next 10 years he held different sales management positions in Seattle, LA and Syracuse NY.  In 1981 he left Oscar Mayer and Co. and started Deli Provision Co. in Atlanta GA, which is the distributor for Boar’s Head Brand Products in the Atlanta metro area.

He is on the board of directors of several charities including the Brain Tumor Advisory Board at Duke University, the Southeastern Brain Tumor Foundation, GOAL Scholarship Board and the Community Foundation of North Georgia.  He is also the trustee of the Epperson Family Foundation.  Stan’s personal interests include golf, snow and water skiing, hiking, biking and squash.

Stan Epperson, Deli Provision Co. Inc., 6925 Discovery Blvd. Mableton, GA Telephone 770-948-9494

Sunset Family Business Radio

Recap: How One Family Business Beat the Odds and Made it to the Fourth Generation

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How do you keep a family-business going and growing into the 4th generation? On Thursday, April 8th, Family Business Radio hosts Meredith Moore and Pat Romboletti welcomed Ross Kogon, President of Pull-A-Part, LLC who shared some of the secrets. A self-service used auto parts and recycling business with 23 do-it-yourself auto parts superstores across the east coast, this 102-year-old family-owned business, begun by Ross’s great-grandfather who picked up scrap with a horse-drawn cart, is in its fourth generation.  An accomplishment achieved by only about 3% of all family businesses.

We invite you to listen to the entire conversation on our podcast and get Ross’ take on succession issues, on-boarding new family member-employees, intergenerational communications, leveraging technology, and growing a vibrant company culture. You will come away with invigorating ideas that are sure to make your family-owned business grow and thrive. And who knows? Maybe even for the next 102 years.

Here are some of the highlights:

We began our discussion by Ross explaining how a family member comes into their family business. He explained that it is a series of steps beginning with the written policy that says each family member-candidate must have a college degree and outside business experience at a professional level for a minimum of five years. Once those requirements are met, then the person must be interviewed by key family members and non-family members who work at the business. “It’s structured enough so that it’s clear the family member wants to be there and they have skills to grow the company. It’s not just a place where family members can be safe,” he said.

He was also quick to point out that this process helps show non-family employees that you belong and you’re not just there because of your last name. “It’s not so much that you, as a family member, are held to a higher standard—it’s that you have a slimmer margin of error in not meeting the standards,” he explained. By the way, non-family members have to go through a similar hiring process, which sends a powerful message to them that they are part of the same team.

Pull-A-Part has opted to use outside advisors, but not outside directors. Outside advisors are sought for their opinions and expertise, which are expressed in regular meetings. Ross values them for their ability to keep the business on track and growing smartly and makes sure they uphold the families predetermined standards and policies. However, the family did not think outside board members served their purpose, despite what the textbooks say, and decided against those relationships.

As for the inevitable conflicts and their resolution, Ross discussed the two mechanisms that Pull-A-Part has in place. First, before undertaking a new project or direction, they sit down and play-forward as many disagreements as they can think of long before there is any emotion attached to it. Then they argue the various merits beforehand and hammer out agreements. When something comes up later, this process gives them the ability to say—“No, wait. We talked about this already and we said…” Ross likened it to putting “a speed bump in front of the anger accelerator.” The other vehicle they use is on the back-end, after a conflict surfaces, when you have the option to write up and present your issues to the board and outside advisors. It’s the “nuclear option” and therefore used sparingly. Ross believes that the process of writing down your position allows you to crystallize your thoughts and evaluate whether there might be other means of resolution that would work better.

When asked about balancing business with family gatherings, Ross was emphatic about habits. He quoted Aristotle who said that excellence is not an act—it’s a habit. In their family, over the years they have practiced the habit of not talking business at family gatherings (a rule helped along by each successive grandmother!). That way, children are tended to, rituals are observed, communications are enriched—and the family stays intact.  And by the way, they have a strict family-tradition—the family gathers every Friday evening for Shabbat dinner.

The other important habit for keeping family and business in the proper perspective comes from the family ethos of philanthropy and giving back to their communities. “They are very important to us. We talk about these two things as much as much as we talk business,” he said. Therefore, they are in the habit of talking to each other about something other than business.

Ross ended the discussion by offering three valuable tips for family-owned businesses:

• Have your disagreements in advance by envisioning various scenarios and possibilities. And have your agreements in advance too. Commit them to paper because “it’s not an agreement, if it’s not in writing.”

• Do not force your children into the business. You really only want family members who want to be there.

• Make the family about more than just the business. If the family only becomes about the business, then you leave too much value on the table.

Ross Kogon, President, Pull-A-Part, LLC, Telephone:  404-607-7000