One of the ways private banks are economic drivers in our region is by supporting our local small business owners. MetroHartford Alliance Content Manager Nan Price spoke with Key Private Bank Sales Leader Elissa Eddie and Senior Vice President Wealth Advisor John M. Jezowski to learn more.
NAN PRICE: In what ways does Key Private Bank provide support to small business owners?
JOHN JEZOWSKI: Key Private Bank serves as a trusted business partner to a business owner and their team. We support our clients by providing capital to grow, general business operating services, treasury and payment solutions, risk management, and more. We also take a consultative role, acting as an advisor to their businesses, and particularly to business owners and C-suite executives. This is true whether they’re a large commercial company, a mom-and-pop small business, or an even an emerging micro business.
ELISSA EDDIE: We want our business clients to consider us a branch of the tree of their trusted advisors. Business owners typically rely upon a number of different advisers such as an accountant, an attorney, and an investment banker. Some businesses, especially those dealing with family dynamics, may even have a psychologist. Together, we make up a kind of advisory board that helps the owner and their leadership team make decisions that impact their business now and in the future.
NAN: In terms of the future, how does Key Private Bank help small businesses with succession planning?
JOHN: While business owners are mortal and have a finite life, businesses can be perpetual if managed correctly. Succession planning is the process of evaluating what will happen to the business when ownership changes. It includes both planned occurrences, such as retirement, transitioning to new family members, or a desired sale, and unplanned occurrences, such as illness, death, or other unforeseen circumstances. Succession planning isn’t just for negative circumstances; a good succession plan also puts a business in the position of being ready to take advantage of positive opportunities when they present themselves.
Succession planning can prepare for a variety of business transitions. These generally fall into three groups:
- passing on the business to future generations
- some type of employee or management-led transition i.e., employee stock ownership plans (ESOPs), management by objectives (MBOs), etc.
- an outright sale or harvest to either a synergistic/strategic buyer or a financial buyer such as a private equity sponsor
There are two approaches to succession planning. One is to take an active role in it; the other is to let manifest destiny happen. We think it’s much better to be proactive than reactive. Our team strives to bring structure and diligence to the planning process. When Key Private Bank works with a business owner, we become part of the team participating in the planning discussions to help the business define what’s going to happen next.
ELISSA: What we bring to the table is in-depth consultation about where their business is and where they want it to go. We can help them with questions like: “If I do want to sell, what does that look like? Who do I need to involve?” We also bring in other members of the KeyBank team to handle other aspects for the owner—for example, Key Private Bank will focus on the personal financial needs of the owner while our Commercial Banking team will focus on the business banking needs.
Our goal is to help business owners understand that strategizing and putting a plan into place long before a transaction begins can have profound consequences in the long run. Having the proper planning documents in place before contemplating a sale or transition can help minimize the impact of taxes and ensure the business owner is able to take full benefit from all the hard work they’ve built over a lifetime.
JOHN: The whole succession planning process can be unnerving and overwhelming. So, understandably, a lot of folks delay it. But it’s important to be proactive because it’s not just about loss on the downside, it’s about lost opportunity on the upside. This can be one of the most important events in the lifetime of a business and the owner, and there is tremendous opportunity to realize the true potential and value of the entity.
ELISSA: Many small business owners don’t really know the ins and outs of mergers, acquisitions, investment banking, how you value a company, and what kinds of trust structures you can put in place. Key Private Bank brings in that knowledge and helps to orchestrate the entire planning process.
NAN: What can small business owners do to get started?
ELISSA: Just like larger businesses, small business owners need to have a financial advisory team who is knowledgeable about their business and who they trust. Oftentimes, small business owners think their business is too small to warrant such resources, but that’s simply not true, particularly when they have employees or family members dependent on that business.
Also, it’s important to stay up to date and knowledgeable in this ever-changing tax environment. We have a team of experts who continue to stay on top of all state and federal tax laws and their impact on local businesses. KeyBank has a team of experienced professionals with the expertise to provide real advice and help guide businesses of all sizes.
About Key Private Bank
For nearly 200 years, Key Private Bank has been at the forefront of helping affluent families take a comprehensive approach to building, managing, and protecting their wealth in any market environment. As a fiduciary, Key Private Bank combines the tailored insights of our local teams with the national expertise of wealth and investment strategists to deliver objective advice and personalized solutions for each of our clients. Key Private Bank is honored to have received multiple prestigious awards for providing clients across the United States with outstanding service, expert advice, and sound financial direction year after year.
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