Business Concern

Rick Riebesell
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  • Management
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Owners of a private business interest have concerns about maximizing the value received from that interest, preventing and resolving owner disputes, and implementing an owner agreement with buy-sell provisions. This podcast deals with these issues.

  1. Oct 7

    Who Reviews the CEO?

    With middle-market or main street businesses, the common business entity selected has been the limited liability company instead of the corporate entity. Even though S corporations provide pass-through taxation similar to the partnership taxation of limited liability companies, a majority of businesses are doing business as a limited liability company. Without getting into a comparison of all the advantages and disadvantages of each entity, one key difference is in the governance of the entity. Both entities can divide ownership and control. With a corporation, a president need not be a shareholder, and with a limited liability company, a manager does not need to be a member. The corporate entity, however, contemplates a board of directors. It is the board that appoints and reviews the executive officers, including the chief executive officer (CEO). Even where a corporate entity is involved, the tendency is to put the same people on the board of directors as are executive officers of the corporation. Rarely do limited liability companies establish boards of advisors to function somewhat like the traditional corporate boards. Most management experts recommend a review process for employees. This provides feedback in a constructive environment to clarify expectations, critique past performance, and make recommendations about future opportunities. It seems logical to ask: who reviews the chief executive officer of the typical middle-market or main street entity? Sadly, the answer usually is nobody. The CEO is often the owner and manager of the business. For the review of the controlling person in the business, it is difficult to find objective reviewers among the other executive officers. Of course, if there were a board of advisors who were not subject to direct control of the CEO, the review might be possible. The same could be said for a corporate board of directors made up of individuals other than the corporation's executives. Often, the obstacle to a board review is the CEO's own reluctance to be reviewed. The most important leadership trait of a CEO is humility. For that reason, CEOs with strong leadership capabilities should welcome a constructive review process. I advocate for the separation of ownership and executive control for a variety of reasons. Where there is this separation, ownership should be represented on the board and participate in a review of CEO performance. I also advocate for the review of the performance of the CEO by independent board members. Boards of directors or advisors can provide reviews of CEO performance including clear expectations, critiques of past performance, and recommendations about future opportunities. If no one reviews the CEO of your business, the owners can decide how governance should work, including who reviews the CEO, as part of the Owner Agreement Project at Business Transition Consulting (btcllc.net). Complete the contact form and arrange a free initial consultation.

  2. Sep 8

    "Leave Well Enough Alone"

    In the arena of closely held businesses, owners are often the founders and the most productive elements of the business. When a business succeeds and consistently earns a profit, the owner, serving as both producer and policy-maker, can make the decision to "leave well enough alone." Doing this, however, ensures that the owner will not realize the maximum value from the business. Chances are, if you founded the business, you are the best producer for the business. Also, as a business owner, the success of the business is likely attributable to your ability as a manager. You have built a team and established a successful business system with your production and management skills. In a competitive business environment, your success – the business achieving profitability – will be reverse-engineered and copied. If you do not grow and improve – change – your competitors will take your profitability away. If your concern is to receive maximum value from your business, you must move out of management and at the same time improve the business. This is not "leaving well enough alone." As the owner of a business interest in a profitable business, your primary concern should be to realize the maximum value from that interest. To be precise, "realize maximum value" means receiving the most net cash for that interest, thereby converting the value in the business interest from a high-risk business ownership to a personal asset held at a relatively low investment risk. This occurs when the sale of a business interest is a wealth-building event. Put yourself in the role of a sophisticated buyer of a business. What is it you want from a business? Fundamentally, you want an established system of profitable operation. If the most important part of that business, be it a producer, a manager, or both, is the selling owner who is going away right after you buy the business, that is a negative factor causing you to devalue the business or not purchase it at all. Moreover, if the business is incapable of change, it will not grow and stay ahead of competition. An owner seeking to sell a business for maximum value will work to become less involved and instill a business process that can adapt to maintain profitability. The change from producer and owner-manager to owner creates wealth for the owner and the owner's family. It is not easy, but neither is founding and maintaining a successful business. Generally, owners who have created a successful business are quite capable of following Prior Diligence and executing a plan to create increased value for the business interest. Using Dynamic Planning, the strategy is implemented in a way that consistently revises and improves the actions taken to reach the goals of the business plan. If you want increased value and wealth for you and your family, adopt a strategy that will stop your productivity and management activity. That strategy should be the basis of a business plan that will cause that change and other changes. That strategy is called Prior Diligence. The planning for that strategy is Dynamic Planning. Find out more about the Prior Diligence strategy and Dynamic Planning at the Business Transition Consulting website, (btcllc.net).

  3. Aug 9

    Slow Is Smooth, Smooth Is Fast

    Something bad and unexpected happens. It is upsetting. Anxiety takes over. The adrenaline response is to do something, anything, right now to stop the bleeding. Soldiers and emergency medicine physicians train for exactly this moment, and they train against the adrenaline reflex response. Reacting quickly without a decision-making process usually means doing the wrong thing quickly. The discipline: slow is smooth, smooth is fast. Slow down to a decision-making process. That process produces a good decision (smooth). A good decision, made without panic, executes faster and more effectively than a poor quick reaction ever could (fast). Effective crisis response is the result of a good decision. Most businesses have no embedded decision-making process for a crisis. When something bad and unexpected happens, they look to an executive officer to react. One person, under pressure, is expected to have the right answer immediately. More often than not, that produces one of two outcomes: a freeze with no reaction and no communication while the damage compounds, or an immediate reaction that was not considered, stepping in the wrong direction and making the damage worse. Speed without a decision-making process is not effective. The businesses that handle crisis well are not the ones with a quick-witted CEO. They are the ones with a decision-making process already in place before the crisis arrives — a group, not a single person, that knows how to convene, how to weigh a decision, and how to communicate it once it is made. That process must exist before the event, not get assembled during it. A group that has never met to decide anything together will not suddenly know how to do it well under pressure, on a deadline, and with real consequences riding on the outcome. That is what Dynamic Planning does. It embeds the process ahead of time: who gets consulted, how a decision gets made, and how the result gets communicated to everyone the decision affects before a crisis, not during one. So, when the bad and unexpected event happens, the business is not inventing a response under pressure. It is executing one it already knows how to build, with people who already know their role in building it. Slow, in this sense, does not mean slow to act. It means slow enough to decide well. The business with that discipline in place reacts faster, not slower, than the business relying on one person's gut reaction because a considered decision does not need a correcting second attempt. If your business does not have a group decision-making process in place before the next crisis, that is the gap to close now, while there is no fire to put out. Learn more about building it at btcllc.net. CTA link: https://btcllc.net/?utm_source=businessconcern&utm_medium=blog&utm_campaign=bc-202608

  4. Jul 9

    The Legacy Trap

    Why Owner-Centered Businesses Sell for Less Successful businesses are not successful solely because of the owners. In my experience, successful businesses have established a culture of performance standards and effective decision-making that enables success. So, is it appropriate for an owner to view a business that the owner has founded and guided to success as a legacy to the owner? My argument would be that a more appropriate legacy would be the wealth derived from the business rather than the business itself. The more the business is about an owner, the less it is worth to a prospective buyer. A sophisticated buyer is not looking for a memorial, that buyer is looking for cash flow from a business that performs well and makes good decisions. A prospective buyer judges a business not by its current owner, but by its employees. Are the employees competent and loyal? Is there a culture of performing well and satisfying clients or customers? Will the selling owner's absence adversely affect the business? Consider two businesses with identical revenue. In the first, the owner is the face of the business, the one who closes every deal, answers every difficult customer call, and makes every meaningful decision. Take the owner out for a month, and performance sags. In the second, the owner has spent years pushing decisions down - employees are trusted, trained, and given the authority to act. Take the owner out for a month, and nothing changes. A buyer will pay a premium for the second business and a discount for the first, even though today's revenue is the same. What is being priced is not this year's cash flow - it is the risk that the cash flow disappears the moment the owner does. This is the part owners resist. Building a business and building your name into it is emotionally satisfying. Pride of ownership is real. But pride of ownership and value from ownership pull in opposite directions once a sale is on the horizon. The wise owner is not looking for recognition for performing in the business. The wise owner who wants to derive maximum value from the business will diminish the owner's role to allow employees to perform and excel. This may not lift the ego, but it will lift the selling price of the business. Diminishing the owner's role is not simply a matter of delegating tasks. Handing off work while keeping every decision on your own desk changes nothing - the business is still built around you, just busier. What has to change is decision-making itself: employees need enough information and enough authority to decide things themselves, and a structure for communicating those decisions so the business runs on a process rather than on the owner's presence. That shift, from an owner who decides everything to a business that makes good decisions without the owner, is the actual work of building a business. The owner's name may not be on the sign in front of the business, but it will be on the bank account with the proceeds from the sale of the business. --- For more on building a business that runs and sells without you go to btcllc.net

  5. Jun 8 ·  Video

    Threats to Business Value are Foreseeable and Preventable

    The three ways business owners lose the value of their businesses are conflict with co-owners, the loss of a critical owner, and failure to prepare for sale. Owners reading this might be surprised to learn that the threats are preventable.

  6. 12/12/2025

    Accomplish Continuous Improvement of Performance

    To ask that every performance be better than the last is to place tremendous pressure on the performer. The aspect of performance is at the heart of most endeavors. Intuitively, we know that performance is not a constant, but in a competitive situation, the goal is for it to improve over a set period of time. It is not enough to ask for consistent effort. When we watch athletic performers, we see that champions have more than just consistent effort; they improve through sound decisions about innovative techniques, effective training, better equipment, and better mental preparation. In business, performance is the execution of a plan, which is the narrative of the decisions of the business. The cycle is well known: set goals, describe action, set mileposts, take action, evaluate, and revise. Assuming the creation of a quality plan, the quality of performance will depend on the execution of the plan. But initial quality is not enough. Business competitiveness requires consistently high levels of performance with an overall improvement of performance over time. This means that taking action, no matter how excellent the plan or the one-time performance, is not enough. It is not enough to repeat a high-quality performance through consistent effort. To achieve a consistent improvement in performance, the decision-making process of the business documented by the revision of the plan, including the revision of the actions to implement the plan, must be continuous. If a business creates a plan that is excellent and implements the plan with flawless execution, but performance does not consistently improve, the business will fail in a competitive environment. The part of the planning process that creates success in a competitive environment and that causes performance to consistently improve, is evaluation and revision. How often do we see businesses taking months to create strategic planning, then finally implementing the plan, only to take months to evaluate and then revise the plan; in essence, taking the same time and resources required to create a new plan. No matter how good the plan, constantly recreating plans and implementing them will not accomplish consistently improving performance. Consistently improving performance is accomplished through constant evaluation and revision of planning coterminous with experience. Experience and evaluation cause revision, and the revision to the plan should be written. How can evaluation result in coterminous revision of the plan? The plan starts with the decisions of the policy-making group about strategy. The action plans are implemented by the executive officers. As the action plans are being executed, those charged with executing the action plans will change the plans to accomplish the task. The experience will be evaluated frequently by those from the policy-making group. At the highest level, the policy-making level where strategic planning is adopted, the planning does not have to be revised as much as at the operational level where action plans are being executed. It is at the operational level that the planning is frequently changed, but the changes are not documented. These informal changes are often what accomplishes the action plan, but frequently others in the business, especially those in the policy-making group, do not know about these changes. Frequently that is because those who change the plan are not sure they have the authority to change the plan but the changes are done to accomplish the task. If the members of the policy-making group do not know about changes to the action plan, their evaluation and further planning will be flawed. Those taking action should be able and required to amend the action plans. In this way, changes are communicated up and down the hierarchy of management. Moreover, changes are occurring with experience, and revisions to the plan are written contemporaneously with the decision to change at the operational level. Those charged with the execution of action should be empowered and required to change the action planning. When this is in place, the plan becomes dynamic – an effective form of communication within the business. Planning is the communication of the decision-making process of the business. The constant questioning of goals, selection of actions, identification of mileposts, and determining revisions should be a series of seamless, constant activity. It is this activity that will enable consistent improvement of performance over time. In business, we must do more than ask employees for increased effort to accomplish improvement of performance. We must establish a process to make good decisions that are documented in dynamic planning that is constantly evaluated and revised at all levels. That is the essence of championship business performance – continuous improvement in performance over time.

  7. 11/04/2025

    The Time Thief

    We have all been there. Rearranging the deck chairs on the Titanic. There was always an unspoken vision – never written but certainly desired. But things got in the way. The problem was that so many issues came up. There was never a quiet period when things could be thought out. There was never enough time to do it right. Then there was no time at all, and what we were doing was too little too late. How many business owners have you been aware of who have never derived full value out of their business? Some owners could not realize their business dreams because of a health issue or burning out. Some owners were forced out by other owners. Most owners fail to realize maximum value from their business simply because no one would buy their business for full value. These owners did not receive full or maximum value from their business because they did not plan, and then all of a sudden, what they were doing was too little too late. Having an owner agreement with buy-sell provisions protects the value of the interests of owners who cannot be involved in the full cycle of the business. Planning for the sale of a business for maximum value is the way to obtain maximum value for a business interest. But most businesses do not have written plans. Why? Business owners will tell you it is because they never had time to plan, but that is not the reason. You will not have time to plan if you continually do those tasks which are urgent but not important over those tasks that are important but not urgent. The business owner should prioritize time for creating a written strategy, implementing a plan from that strategy, and revising the plan as it is executed. Not doing that by prioritizing urgent but not important tasks that could be delegated is a form of procrastination – a fear of the difficult tasks involved in the important activity of planning. For a multiple-owner business, the values of the owners should be articulated one to the others and a strategy, like the Prior Diligence strategy, developed from those conversations. This is not easy, and it requires quality time for the owners to communicate. From this strategy, a plan of action through Dynamic Planning should be developed through group decision-making involving all elements of the business. This is also difficult, but it can be accomplished, and it becomes easier as a group decision-making policy becomes embedded in the business. Don't let the time thief steal your chance to get full value from your business. Learn how at the Owning a Business substack (https://rickriebesell.substack.com/welcome).

  8. 10/01/2025

    Delegate – Unlock the Maximum Value of Your Business

    Owners of small to medium sized businesses often find it hard to delegate management tasks. This is especially true of founders of the business. Here is a critical truth: to the extent you are engaged in management of the business, you are decreasing the value a buyer will pay for the business. A buyer wants a business that runs itself, not one that depends entirely on you and other owners. Full delegation of management responsibilities is not just a way to reduce your stress; it's part of Prior Diligence, a strategic move to unlock the maximum value of your business through a successful sale. How can you implement delegation of management? It requires a structured, multi-step approach that shifts responsibilities from you, the owner, to your capable business team. The first step is to audit what management work is done by owners over a period – perhaps a week, or even for a month. Identify the tasks that are urgent but not important – repetitive, non-strategic tasks such as routine administrative work, scheduling, or data entry. Also identify the important but not urgent tasks – strategic planning, monitoring of operations, and leadership activities – which are ownership tasks. Review the personnel available for delegation in terms of willingness to accept additional work, current skills, and potential for growth. Initially delegate urgent but not important tasks to the right individuals to successfully accomplish the tasks. The delegation must be a clear communication of the task and the expectation of performance. If the task is not described clearly, the performance may not meet the expectation of the delegator. On the other hand, if the performance desired is not clearly defined, it will be difficult to recognize the success of the accomplished task. The description of the delegated task should include quality standards, non-negotiable details of desired procedure, the action that defines accomplishment, and the specific time for completion. To avoid micromanaging or hovering, set regular milestones with specific metric standards that will indicate progress and be instances of mutual communication to prevent misunderstandings or failure to complete the task on time. Ensure the person receiving the delegation communication has the necessary authority (access to systems, permission to spend up to a certain amount, and decision-making power) and resources (tools, budget, and training) to complete the task without needing to constantly revert to you. If the task is new to the person receiving the delegated task, provide coaching or written procedural instructions as to how to accomplish the task. Where there are problems, the communication protocol should require the delegated party to offer a proposed solution to the problem presented. The delegation process is not complete until the task is finished and reviewed. Once the task is finished, meet with the employee and provide feedback. Praise effort and recognize accomplishment. Provide constructive guidance on what could be done to improve performance and accomplishment in terms of the specific task delegated and the goals of the business plan. Ask for feedback from the party having accomplished the delegated task to help you improve your delegation process. Utilize the success of this task accomplishment to build confidence and trust for both the delegating party and the party accomplishing the delegated task. As the individual demonstrates competence, gradually increase the complexity and scope of the tasks you delegate to the employee, transitioning from delegating a single task that is urgent but not important to delegation of an important function (for example, from running one report to being responsible for the entire monthly reporting process). The steps to implementing effective delegation of management tasks from a business owner to an employee of the business are: audit the tasks completed by an owner in a period, identify the tasks into two categories – urgent but not important and important but not urgent, review the personnel to receive delegated tasks for skills to accomplish the task and willingness to accept the delegation, delegate an urgent but not important task with clear communication, establish milestones to measure progress and signify times for communication, recognize accomplishment of the task with feedback recognizing effort as well as accomplishment, and receive feedback on your delegation process. You can be the owner who successfully delegates managerial responsibility to employees and thereby increases the probability of utilizing the Prior Diligence strategy and Dynamic Planning to receive the maximum value from your business interest. Complete information on the Prior Diligence strategy and Dynamic Planning is available at the Owning a Business Substack (rickriebesell.substack.com).

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Owners of a private business interest have concerns about maximizing the value received from that interest, preventing and resolving owner disputes, and implementing an owner agreement with buy-sell provisions. This podcast deals with these issues.

Information

  • Creator
    Rick Riebesell
  • Years Active
    2019 - 2026
  • Episodes
    97
  • Rating
    Clean
  • Copyright
    © Business Transition Consulting LLC
  • Show Website
    Business Concern