BERLIN - Transferring ownership of a business from one generation
of owners to the next isn’t as simple as signing a form and
figuratively handing over the reins. Jesse Ziemienski, owner and
president of American Tree Experts in New Berlin, knows that all
too well, having taken the business over from his father and
preparing to hand it down to his son.
is so much chemistry involved and every situation is different,”
Ziemienski said. “You need to have someone who is interested and
wants to do it.”
Tree Experts was founded in 1950 by Ziemienski’s father,
Chester, and now Ziemienski is preparing to pass it to his son
Dean, who is vice president.
said it’s important that an owner grooms the next generation to
properly take over the business early so they reach the point
where they really want to do it. He said it’s also important for
business owners to realize there is much involved with running a
business, such as employee and customer issues, taxes and
McRae with Water Street Advisors agreed.
it’s a comedy, sometimes it’s a tragedy and sometimes it is a
great legacy, success story,” McRae said, adding that just
because a person is raised in a business, doesn’t “really mean
that it’s in your gene pool.”
Govern, an attorney with DeWitt, Ross & Stevens, stressed that
preparation to transfer a business, whether to the next generation
or an employee, needs to be done in advance.
said it’s important to work with a team on transferring
ownership, including a bank, law firm and others who understand
the factors involved.
addition, Govern said it’s important to “make sure that the
transition is structured in such a way that it’s favorable.
You’d like it to be a win-win situation so mom and dad and
grandma and grandpa aren’t riding off into the sunset without
fact, one of Ziemienski’s sons has no interest in the business.
When he took the business over in 1989, Ziemienski said, it was a
fairly bare-bones operation with no permanent facility.
we just came up with a purchase price between my dad and I and I
bought him out and he backed out and I took over the reins,” he
are more complicated with the transition from second- to
said American Tree Experts has more value now than it did in 1989
so he has a different arrangement with Dean, who is getting
compensation for the hours he has worked. The hope for Ziemienski
is that Dean will have a 25 percent ownership in the business when
said one of the biggest mistakes owners can make is going on
preparing the next generation for leadership and just assuming
they know they know by osmosis by seeing you make decisions,”
McRae said about a frequent mistake. He said it’s important to
prepare the next generation of owners to understand the financial
risks and rewards. They also need to learn how to handle customers
and the responsibilities and risks connected to owning a business.
only are employees’ well-being vulnerable when a business
changes ownership — so are the suppliers and others who do
business with it, McRae said.
not just your family, not just the people who work for your
family, it’s the community,” he said.
said by having his son earn a percentage of the company through
working for it, he kept Dean invested in the company and its
future. There isn’t anything in writing, however, but Ziemienski
said his son understands that should he quit he’ll lose that
equity he’s earned.
of the big advantages is not having to find a buyer. You can find
a lot of businesses closing because they can’t find a buyer who
will pay what price they want,” he said. “They understand the
operation with a running start so he’s going to know how to
handle things and that’s a value to me because I can probably
get out of the business what it’s worth, but that’s never a
guarantee when you are in the marketplace.”
cautions that just because a business remains in the family does
not guarantee success. “It’s
often not what the child has the energy or desire to do. It’s
amazing how many people just assume they are going to do it,” he
will give a presentation on transferring ownership of a business
on May 4 at Westmoor Country Club in Brookfield with Sikich
Financial and ActionCoach. It is a presentation he has shared
before and he said is in demand as baby boomers prepare to retire.
to Metropolitan Milwaukee Association of Commerce, Govern said,
there are approximately 27,500 businesses in the metro Milwaukee
area with fewer than 100 employees. Of them, 12,290 are owned by
individuals 55 years and older and 4,370 are owned by individuals
65 years and older.
the next 10 years, Govern said about 70 percent of small
businesses will have owners who are retiring.
learn more about the ownership transfer presentation, go to aceg.biz.events.
At a glance
27,500: approximate number of businesses in the Milwaukee metro
area with fewer than 100 employees
12,290: business owned by individuals 55 years and older
4,370: businesses owned by individuals 65 and older
Metropolitan Milwaukee Association of Commerce