Craig Addington is CEO at the country’s oldest association management company, Thomas Associates, Inc. They provide management services for manufacturing associations, doing the administrative work and project management, from booking meetings to monitoring codes and standards, helping with board governance and more. Craig came to TA in 2004 and in 2017 he and three shareholders purchased the company from Craig’s father. He and the other shareholders recently engaged Mark Dorman and Legacy Business Advisors to create a succession plan for long-term success of the company.
What prompted you to begin succession planning with Legacy Business Advisors?
We wanted to create a plan so we’re prepared to continue the success of our company for the long term. We’re a well-respected company in our industry and we want that to continue – to serve our customers and provide a place where people can build their careers. But we also want to make sure that when each shareholder is ready to leave, we have a plan to buy them out.
Why plan an exit strategy when you and your shareholders are relatively young?
Our four shareholders range in age from 57 as the oldest and me the youngest at 46. Having gone through a succession process when we bought the company from my dad, we learned powerful lessons on what to do and what not to do. Being able to communicate and point to a plan in writing and follow it – that’s important to the long-term success of the company. And it allows each shareholder the freedom to do what they want to do.
What’s your advice to other business owners who have not yet started succession planning?
Have open communication, set a plan early on, and invest the time and money into planning. People may balk at it and say, “I don’t want to pay for that.” But in the long run, it’s peanuts compared to what you may lose or pay out later when you want to exit the business and you’re not prepared. I can’t stress that enough – start early.
What was helpful about the Capitaliz business valuation report from Legacy Business Advisors?
I’m a visual person, so I like to see the dashboards with analytics and metrics. It’s in real time, so you don’t set it and forget. We can see our weaknesses and strengths and then do things to maximize the value of our business. As leadership, we can address any issues, see where to focus, and know where to put our resources.
How hard was it to gather your business data and get it into the Capitaliz digital platform?
I took the lead, with Mark and his team asking me big picture questions about our operations and where we are. They also got input from each individual shareholder. When Mark presented the findings in the first round of the report, we had to tweak some things—but it was all visual and we could see it rather than just talk about it. It was a very collaborative process.
How did the Capitaliz reports change the way your run your business?
On the dashboard you can see the actual value of your company. You realize you have control over that figure. If the report comes back saying your company is worth $1 million, you realize you can follow the path advised by Mark and his team – based on data in the Capitaliz reports – and if we do that, we could be worth as much as $4 million. It puts the keys in your hands and asks, “Where do you want to go and how do you want to do it?”
Why is it important to understand what your business is worth – and your future options?
It’s incredibly important that each shareholder knows where they stand and where we are as a group. We need to know our options – whether we sell to another shareholder or buy out another one or sell to a third party. We need to know how to maximize the value of the business but also maintain our brand and all the work we’ve done in our industry.
What’s been most helpful in working with Mark and the Legacy Business Advisors team?
I’ve enjoyed working with Mark. He communicates well and has experience running his own business, so he brings that to the table – as well as his experience with other clients. At Thomas Associates, we’re all new owners, so leaning on the experience of professionals who’ve been there before is invaluable. It provides us with options and directions. It shows us possibilities and also mistakes to avoid.
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