Cover Story: Securing your future
1 Feb, 2009 By: Daniel G. Jacobs Landscape ManagementRon kujawa stopped taking a paycheck in 1997.
Nearly 45 years ago, the 76-year-old father of four founded Kujawa Enterprises Inc. (KEI), just three years after he married Sally, who still serves dual roles as CEO and CFO. While he still goes into the office often, Kujawa, who long ago relinquished day-to-day responsibilities, and his wife enjoy an active semi-retirement that this year includes trips to China, Canada and a pair of visits to Africa. While wise investments have secured their financial future, the Kujawas' main concern is ensuring KEI continues and is able to provide for their children's futures.
 Richard Heller, Greener by Design |
In fact, it was money problems that led Kujawa to start working on his long-term finances.
"I never thought of it as retirement planning," he recalls. "In 1972, I had to borrow money to pay taxes."
Kujawa started talking to an advisor who served as both his accountant and attorney. It was then Kujawa began working to create the financial stability that would sustain his day-to-day operations — and also provide him with a comfortable life when he finally decided to hand over the reins.
When an owner starts a business, retirement might be decades away. Working with your advisors to develop a plan early on and periodically revisiting that plan help ensure comfort in your golden years and the successful transfer of your operation — whether it's to a family member, your employees or someone outside the operation.
Volumes have been written about the difficulty of knowing when to make the change. Many owners, like Yardmaster's Kurt Kluznik, know it's an issue, but they have yet to embark down that path.
"I don't have a successor or a partner," says Kluznik, who founded the Painesville, OH-based company in 1971. "I don't have a timeline. I need to be doing that."
Solutions
Even for those who have offspring waiting in the wings, transitions can be a challenge. While the way that scenario plays out is unique to each entity, the question of when to begin the process is much simpler.
 Jim McCutcheon, HighGrove Partners |
"With estate planning, (owners) should be doing it when they have accumulated wealth, when it's going to present a tax situation," says Michael Napolitano, a partner with Citrin, Cooperman & Co., which provides tax and accounting services to middle market companies. "You may not make everyone happy, but the business has to be first," he adds. "We try to get them to look at it in those terms."
It's a lesson Kujawa learned early on.
"I was a damn good salesman; I didn't know a hell of a lot about business," he admits. "I've learned a lot since. One lesson that I learned was 'know what I didn't know.' "
Kujawa is now working through the second phase of business transition. While each of the Kujawa children owns 12% of the company (Sally has the other 52%), Chris was the heir apparent. Joe joined the business a few years later. Another son and daughter have lives outside the family business.
Chris and Joe are looking to buy out their siblings' shares.
"We've come up with a few different glitches that we're trying to figure out," Kujawa says. "We haven't come to a complete agreement on it on all four sides. Whether the company should buy the stock, whether the individuals should buy (the stock); or if they want to retain any stock on their own as a minority stockholder with a look-back provision if the company is sold."
As for Sally's shares, those are part of the estate.
"We have to be cognizant of the children and their tax problems," Kujawa says. "For them to get a chunk of money at a certain time might not be the best thing. Maybe it's going to be an installment purchase. Each of these things has to be thought out."
And thinking it out, Napolitano stresses, is the important factor.
 (L to R) All American Turf Beauty's Jim O'Loughlin, VP sales & marketing; Daryle Johnson, CEO; Kevin Johnson, president; Clarice Baiotto, administrative assistant |
"A lot of business owners don't want to think about estate planning until it has a financial impact on the business and the children," he says. "That will then bring in the succession planning, because that is a very strong issue a lot of business owners know is out there, but they don't want to address."
Richard Heller, owner of Greener by Design, Pelham, NY, fits into that category. The self-described "49-year-old adolescent" was reminded of his own mortality recently when a friend was diagnosed with cancer. He's yet to seriously begin his retirement planning, but knows it must be done: "I'd better think about this stuff."
Jim McCutcheon, CEO and partner of HighGrove Partners, Austell, GA, is only in the exploratory stage. His kids are too young to take over the business, and his partner's children are off doing their own things. McCutcheon is reviewing options, including identifying someone internally who might one day take over operations.
But, he admits, while it's one thing to have a strong manager, "it's another thing to hand that guy the keys."
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