Unlocking Private Company Wealth is all about managing the wealth represented by the ownership of a private business. The book calls for business owners to treat their illiquid, private company wealth with the same care and respect as their liquid wealth and retirement funds.
Unlocking Private Company Wealth helps turn the business into the liquidity-creating vehicle it needs to be for the business owner to become independent of the business and truly free to sell it, stay with it, or transition it to others.
Here what one business owner says:
I used to think it was odd how business owners would closely monitor the performance of a few hundred thousand dollars in a retirement account, but have no idea how many millions their business was worth. Stranger still was the fact that their financial advisers didn’t seem to recognize this as a problem. Unlocking Private Company Wealth illuminates this lopsided view of wealth management and offers a number of smart solutions to fit any business owner situation. This book is a must read for business owners and their advisers. Not reading it – or taking Chris Mercer’s wisdom to heart – is leaving money on the table. Unlocking Private Company Wealth brings clear perspective and concrete solutions to one of the missing pieces of business ownership – how to turn a lifetime of work into a legacy of wealth.
–Barbara Taylor, MBA, Co-Founder, Allan Taylor & Company, Rogers, AR
The book has three sections and twenty chapters. The sections are:
- Section 1: Managing Private Company Wealth. These chapters compare and contrast the management of private company wealth and liquid wealth, including retirement funds and other liquid assets. The myth that owners are managing their private company wealth merely by running their businesses is dispelled. Private company wealth should be managed with focus and respect. Chapter 5 details The One Percent Solution and an overview of private company wealth management activities is provided. The last chapter in the section discusses valuation concepts that are important for ownership and management transitions.
- Section 2: Tools for Managing Private Company Wealth. The second section of Unlocking Private Company Wealth introduces a number of tools and strategies for managing private company wealth. While the tools and strategies discussed are tools of modern corporate finance, the chapters are understandable and accessible. The role of dividends and dividend policy is discussed at length and we learn that every company has a dividend policy, whether it is stated or not. The use of reasonable leverage to accelerate shareholder returns and to enhance ongoing returns is discussed in terms of leveraged dividends, leveraged share repurchases, and leveraged ESOPs. There is also an important chapter on buy-sell agreements and life insurance.
- Section 3: Perspectives on Managing Private Company Wealth. The third section puts the wealth management concepts of Section 1 and the tools and strategies of Section 2 into perspective. We talk about transferable value, or value that others with capacity will pay for. Transferable value is fueled by identifiable earnings, or earnings that can be seen as believable and repeatable. We look at the ways that the next investors will look at your company, reaching the conclusion that you should look at it the same way. There is a chapter titled “Bad Things Happen to Good Companies.” Focus on minimizing risks and concentrations while there is time and on doing those things that are necessary to manage private company wealth when you can, because if you wait until it is too late to diversify, it will be too late.
In his forward to Unlocking Private Company Wealth, Jim Clifton, chairman of Gallup, and author of The Coming Jobs War, suggests strongly that private companies in America should subscribe to the tools and strategies outlined in this book. He says that if that happens, the world might be changed for the better. Gallup has certainly changed for the better as have many other private companies for implementing one or more of the strategies discussed in the book.
We don’t know about the world, but business owners will be better off if they will consider and adopt some of the tools described in this book. The same is true for advisers, who can help owners in the process of managing private company wealth.
If you are an adviser to private business owners, Unlocking Private Company Wealth is also helpful you. It helps you understand how to talk to business owners about managing their private company wealth. It provides you with a diagnostic tool to help you understand your private company owners’ needs regarding wealth management. Unlocking Private Company Wealth helps you help your clients in ways they will appreciate.
Another business owner says:
It is best to take action when the circumstances are favorable and the timing is right. Unlocking Private Company Wealth examines strategies you can implement now to increase the future value of your closely held business.
–Bill Rankin, CPA, Chief Financial Officer, Blue Bell Creameries, LP, Brenham, TX
Like Bill Rankin says, you definitely want to bring strategies to the table to enhance the future wealth of your business owner clients.
Whether you are a business owner or an adviser to owners, Unlocking Private Company Wealth is a must-read. It is a must-share with your fellow owners, or, for business advisers, with your business owner clients.
When you purchase, you will receive the following complimentary electronic resources:
- Buy-Sell Agreements for Closely Held and Family Business Owners. The print version of the current book on buy-sell agreements sells for $30.
- Buy-Sell Agreement Checklist. This checklist provides a detailed outline for reviewing your buy-sell agreement from business and valuation perspectives.
- Buy-Sell Agreement Promissory Note Checklist. This resource outlines considerations for shareholder promissory notes issued pursuant to buy-sell agreements.
These resources are invaluable when reviewing a buy-sell agreement. After purchasing the book, you will receive a link enabling you to download the PDF file containing all three valuable buy-sell agreement resources.
To continue the conversation about the topics found in this book, visit Chris Mercer’s blog and subscribe to receive updates.