I-Succession Roll Out!

Posted By: Dan Isard News,

I-Succession Roll Out!*

By Daniel M. Isard, MSFS
Founder, The Foresight Companies, LLC

I have been entrusted by your board of directors and the executive team at IFDF to create a customized program to help focus the mission of IFDF to business succession.  IFDF is unique in the world of funeral directors’ associations in that it focuses on the needs and benefits of privately owned funeral home.

The instructions given to me by your leaders were:

  • Create an educational and operational program
  • That will help business owners make good decisions
  • Concerning their business succession planning

My career has been invested in helping the owners of privately owned funeral (and cemetery) businesses maximize their business profit and value.  I have helped more than 500 family firms transfer their business to kids, key people, regional colleagues and national companies over the last 40 years.  Many of those clients were in Florida.  My work with the IFDF goes back almost 30 years!  This was the perfect project for me to dedicate my efforts.

In creating I-Succession, I wanted to focus on the myriad of problems with business succession.  Those problems tend to be:

  • Inability to get qualified financing for the buyer/successor
  • Inability to overcome the fear of the owner of running out of money during their lifetime
  • Having qualified lawyers, accountants, valuators, transaction specialists, and insurance providers to help make a transaction go smoothly

I knew that if we can create an educational path that helps a member understand these issues, they might not jump at a first offer from a national company.  For the firms in the association that want to grow by acquisition, we wanted to put them on an even footing of a national acquisition company.  To that end, we have created an educational platform of short videos (at present there are 8) to help educate members.  These programs run the gamut from financial independence, valuation of their business, lending, accounting, transaction planning, and the path for buyers.    Over time we will also feature videos from those that have gone through the process of I-Succession to share their experiences with other members.  We will be unveiling other educational programs including seminars and workshops as well. 

I-Succession has tracks depending upon the members perception of how they would like their succession to be.  Those paths include, transfer within their family, transfer to a key person, transfer to a regional operator, or being a buyer.  Other paths that we are still planning out include the firms that are right for a national buyer and those firms that want to stay privately owned, but we have to recruit a person to relocate and come into the business over a short time.

There are two stages for I-Succession.  The first is the Planning Stage.  The Planning Stage clearly computes the assets a member should have to be financially independent and contrasts that to the financial need for their buying power to keep pace with inflation during their lifetime.  If the Planning Stage gives the member the comfort for their lifetime plan, then the member can explore the Implementation Stage.  The Implementation Stage is working with the possible buyer to make the transaction happen.  Once the buyer is locked in, then the lawyers, accountants, lenders, and insurance people can get everything ready for a closing.  The cost of a professional in any succession plan can be expensive.  By using experienced leaders, we can keep the cost down to about half of what these matters normally cost.  By using two stages, a member can do some research and limit their costs.

I-Succession is very lucky that the financing will not be an issue for any transaction properly structured.  Teresa Carlson and The BanCorp have banned together with Homesteader’s Life Insurance Company to create a Wall Street-type of financing for your Main Street businesses.  I can think of two clients I worked with in my career, from Florida, that would still be privately owned, had they had this type of financing available to them, to help grow their business.  I learned early on that when someone said to me, “The financing is not going to be an issue”, the financing was always going to be an issue.  Most local banks don’t make good funeral home acquisition loans.  If it is not a problem before a closing, it is a problem within a year or two post-closing.  For the IFDF and I-Succession, financing is not an issue!

The IFDF has been a leader as an advocate of the equal footing of the private sector owner.  With I-Succession they are taking that responsibility to the next level!

*Article will appear in The Independent Reporter, Volume 7 Issue 2.