subject: Generational Equity Information [print this page] Generational Equity Information Generational Equity Information
Professional Evaluation
A written summary offers the opportunity to provide lenders with a brief narrative about each family member, what his or her background is and what role he or she fills in the company.
It is also an opportunity to address the question of transition between the generations, describing the plan and demonstrating the company is prepared for its future.
The summary should not just state the company history. It is important to put some numbers behind the plan.
Lenders focus heavily on current and historic financials, but it is also key to include hard numbers that show the company's goals moving forward. Lenders want to see the company's projection for the future and hear the assumptions behind those projections.
Bank executives will ask tough questions to determine whether those projections and assumptions are realistic, so owners should be prepared to defend goals by answering "how" and "why."
Strength in numbers
Family business owners who have assumed leadership roles in their trade associations admit that the workload can be heavybut they say the payoff is well worth it.
Business Valuation :Put it in writing
Before going to meet with a prospective lender, there are two important steps a family business owner should take.
First, meet with key family members.
They must be in full agreement on the company's vision and strategy.
Once all key family members are in agreement, put that plan into writing in an executive summary. Putting the business plan on paper helps organize the owners' thoughts and shows a preparedness that is looked upon favorably by banks.
