FAMILY GOALS____________________________________________________________

Developing a Mission Statement for the Family and Their Business

BUSINESS GOALS____________________________________________________________

FEI Responds to State of the Union Address

Letter from PartnerWELCOME TO THE INAUGURAL ISSUE

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February 2012

Contents

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2 WELCOME TO THE INAUGUR AL ISSUEWelcome to the inaugural issue of SingerLewak’s “Entrepreneurial & Family-Owned Business (EFOB)” e-Newsletter. Many Entrepreneurs develop the same relationship with their partners that mirror Family- Owned Businesses, or have to deal with family matters of one shareholder/partner, if not more. Thus, we have combined these two ownership types and have set out to discuss common opportunities and issues that each deal with, on a daily basis. We are committed to issuing this newsletter monthly, acting as an up-to-date resource for privately-owned companies.

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4 DE VELOPING A MISSION STATEMENT FOR THE FAMILY AND THE IR BUSINESSA mission statement helps clarify the goals and objectives of the family and the business they own. It is important to first understand the difference between a mission statement and a vision statement.

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6 FE I RESPONDS TO S TATE OF THE UNION ADDRESSFinancial Executives International (FEI), a professional association for senior-level financial executives from both major public and private companies, today issued a statement to address reservations with certain key points of President Barack Obama’s State of the Union address Tuesday.

February 2012

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WELCOME TO THE INAUGURAL ISSUEBY DAVID KRAJANOWSKI | MANAGING PARTNERdkrajanowski@singerlewak.com | 949.261.8600

Welcome to the inaugural issue of SingerLewak’s “Entrepreneur-ial & Family-Owned Business (EFOB)” e-Newsletter. Many Entrepreneurs develop the same relationship with their partners that mirror similar relationships within Family-Owned Busi-nesses. Thus, we have combined these two ownership types and will discuss common opportuni-

ties and issues that each deal with on a daily basis. We are com-mitted to issuing this newsletter monthly, acting as an up-to-date resource for privately-owned companies. We will be including articles from our Firm experts, as well as providing outside articles that we feel will provide great insight into specific topics that are significant to you.

I’d like to present to you our Entrepreneur & Family-Owned Business Essentials Navigator icon. What is symbolized here is that the greater the intersection of 3 EFOB objectives (Family, Owner, Business Goals), the more functional and successful the business and the personal lives of the EFOB owners are. The smaller the overlap, the more controversy and disharmony ex-ists.

Over the next several e-newslet-ters, we will be providing and revealing guidance for what we call the “SingerLewak’s Seven Essentials of a Successful EFOB”. These Essentials are the follow-ing:

Developing a Vision for the Business (and the Family) – we will be addressing the impor-tance of defining a vision for the EFOB and how to conduct effec-tive planning sessions (especially when family is involved).

Harmonizing Family and Busi-ness – we will be discussing how to assemble key building blocks to:

•Hire and dismiss family mem-bers

•Compensate family members in the business

•Deal with family members that don’t work in the business

Leadership and Governance - topics will include:

• What makes an effective leader

• The importance of governance to manage risk and make your business successful

• Advisory Boards - how to design them and why they are useful

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We are committed to issuing this newsletter monthly, acting as an up-to-date resource for privately-owned

companies

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Effective People (and Family) Management Culture

•Why an effective people man-agement culture is imperative for a successful business

•Hiring and rewarding the right people

•Effective evaluation systems

•Making non-family members successful in a family-owned business

Proactive Operations, Tax and Financial Management - a mul-titude of topics including:

•Choosing the right entity

•Maximizing Enterprize Value while balancing your tax cost

•Effective tax planning includ-ing maximizing use of incen-tive based tax credits

• IT – the right choice including “Cloud” computing, managing your asset

•Lease/Buy decisions

Managing and Adapting to Change - re-inventing the busi-ness by listening to your market-place

Succession and Transition Planning

•Define your retirement strategy early to successfully navigate your business to fulfill your goals

• Identify the next generation of leadership, whether inside or outside the family

•Transitioning to the next gen-eration – a process for planning and executing

•Estate Planning and wealth transfer - Who gets what and when

•Retirement plans and buy-sell agreements

• Positioning your company for the right sale

The list is long, yet quite com-prehensive. With SingerLewak’s 50 plus years of experience, we

deal with these issues daily and can help you navigate the waters ahead. Before we get started, we would like your input in identi-

fying those topics that have the highest priority to you. Please email me at dkrajanowski@singerlewak.com to provide your insight into what topics you would like covered first. In conjunction with the newsletter, we will be hosting a seminar series to address these topics on a more personal basis. The seminars will be intimate in size and geared towards an inter-active exchange between attend-ees and discussion leaders.

The list is long, yet quite comprehensive. With

SingerLewak’s 50 plus years of experience, we

deal with these issues daily and can help you navigate

the waters ahead

DEVELOPING A MISSION STATEMENT FOR THE FAMILY AND THEIR BUSINESSBY DAVID KAMATH, CPA | PARTNERdkamath@singerlewak.com

A mission statement helps clarify the goals and objectives of the family and the business they own. It is important to first un-derstand the difference between a mission statement and a vision statement. A mission statement talks about how the organization will get to where it wants to be, while defining the organization’s purpose and primary objectives.

Whereas, a vision statement outlines where an organization wants to be and communicates both the purpose and values of the organization. In this article we will be discussing the creation of a mission statement.

Family businesses should con-sider having two mission state-ments, one for the family and one for the business. Generally there are many more emotional issues that have to be dealt with at the family level that do not be-long in the business. So it makes sense to first create a mission statement for the family. In this order, the more personal fam-ily values can drive the values of the business. The family mission statement would take the form of a declaration that the family wishes to serve a greater purpose than just the creation of wealth.

After deciding on this approach, the first agenda item is to sched-ule a meeting of the family, mak-ing sure all family members are

able to attend. Consider bringing in a trusted advisor (CPA, At-torney etc.) as a facilitator. Now get down to some serious brain-storming. Here is a list of some things to discuss:

•The purpose of the family and its business.

•The family’s beliefs and the values behind those beliefs.

•Sale of the business and the circumstances under which this may have to be considered.

•The family’s vision for the future.

•The management of the busi-ness. Who in the family will be involved and who will not.

•The qualifications required for family members to have posi-tions in the business.

•The governance of the business. Selection of the Board of Directors.

•All other issues that surround every family member’s dreams and aspirations.

A mission statement talks about how the organization will get to where it wants to

be, while defining the organization’s purpose and

primary objectives

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Next, prepare a statement that defines the mission to accomplish the vision that is consistent with the purpose and values of the family.

The values defined in the family mission statement will now form the basis for creating a mission statement for the business. It is time for another brainstorming session, this time with key man-agers and family members in-

volved in the business. Answering some of the following questions will help define your purpose, business and values so you can create a mission statement for the business:

•Why are you in business?

•Who are your customers?

•What is the image you want your business to convey?

•What is the nature of your product or service?

•How do you differentiate your-self from your competition?

•What kind of relationship you wish to maintain with your vendors?

Once you have compiled a list, prepare a declaration that states the purpose, business and values that can now be communicated

to everyone. Post it in your office, print it on all marketing materi-als and business cards, live by it and run a successful family busi-ness for years to come.

Prepare a statement that defines the mission to accomplish the vision

that is consistent with the purpose and values of the

family

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FEI RESPONDS TO STATE OF THE UNION ADDRESSBY FINANCIAL EXECUTIVES INTERNATIONAL

WASHINGTON and MOR-RISTOWN, N.J., Jan. 25, 2012 -- /PRNewswire/ -- Financial Executives International (FEI), a professional association for senior-level financial executives from both major public and private companies, today issued a statement to address reservations with certain key points of Presi-dent Barack Obama’s State of the Union address Tuesday.

“While I applaud the president’s commitment to restore jobs, as well as his call to lower the cor-porate tax rate to make American companies more competitive in-ternationally, the president once again calls for tax increases on many corporations and individu-

als who are responsible for gen-erating new investment and jobs here at home,” said Marie Hol-lein, President and Chief Execu-tive Officer, Financial Executives International.

“The president’s proposals seem to overlook the fact that more than half of American jobs are supported by those whose taxes would be raised substantially un-der his plan. We believe, instead, that it is possible to develop economic policies that both foster job creation and reward the suc-cess of those who have one.”

Corporate Tax Policy: The president directed Congress on Tuesday to “bring jobs back” by changing tax policies that he says incentivize outsourcing. FEI’s Committee on Taxation supports

corporate tax reform that would lower the corporate income tax rate and put in place a territo-rial tax system to improve the competitiveness of American companies at home and abroad. FEI is encouraged by the presi-dent’s recognition of the fact that the U.S. has one of the highest corporate income tax rates in the world. FEI awaits with concern further details on the president’s

“basic minimum tax” proposal on American multinational com-panies.

Regulatory Relief: FEI com-mittees are in basic agreement with the president’s statements in

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FEI committees are in basic agreement with the president’s statements in

support of regulatory relief to entrepreneurs and tax relief to small businesses

wishing to expand

We believe, instead, that it is possible to develop

economic policies that both foster job creation and

reward the success of those who have one

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support of regulatory relief to en-trepreneurs and tax relief to small businesses wishing to expand.

Individual Tax Rates and Privately Held Companies: FEI is alerting its private company members to pay close attention to what President Obama said in regards to individual tax rates. FEI supports reforming cor-porate and individual tax rates concurrently. By not extending the 2001 and 2003 tax cuts to all Americans, these privately held and family-owned businesses may find themselves in challeng-ing situations as they deal with higher tax rates, sapping capital that could be spent on expanding their businesses, increasing work-ers’ wages or creating new jobs.

Consequently, further increases in individual tax rates affect not only private companies, but

could also jeopardize America’s fragile economic recovery.

About FEI

Financial Executives Interna-tional is the leading advocate for

the views of corporate financial management. Its 15,000 mem-bers hold policy-making positions as chief financial officers, treasur-ers and controllers at companies from every major industry. FEI enhances member professional development through peer net-working, career management services, conferences, teleconfer-ences and publications. Members participate in the activities of 85 chapters, 74 in the U.S. and 11 in Canada. FEI is headquartered in Morristown, NJ, with additional offices in Washington, D.C. and Toronto. Visit www.financialex-ecutives.org for more informa-tion.

During the Conditional Designation phase, a business may generate incentives dependent

on whether the EZ is a redesignated zone or a brand new designation

W W W.SINGERLE WAK .COM | 877.754.4557

DAV ID KR A JANOWSKI dkrajanowski@singerlewak.com | 949.261.8600

ROB SCHLENER rschlener@singerlewak.com | 949.261.8600

J IM PI TR AT jpitrat@singerlewak.com | 310.477.3924

DAVID K AMATH dkamath@singerlewak.com | 949.261.8600

STE VE CUPINGOOD scupingood@singerlewak.com | 310.477.3924

GLENN CARNIELLO gcarniello@singerlewak.com | 949.261.8600

SALLY AUBURY saubury@singerlewak.com | 818.999.3924

MARK COOK mcook@singerlewak.com | 949.261.8600

THE SKILLS YOU NEED. THE SERVICE YOU EXPECT.

OUR FIRMENTREPRENEUR-OWNED BUSINESSESSingerLewak knows the importance of relationships to excel and meet the needs of entrepreneurs and their businesses. Our client service relationship stresses client strategy and sound advice in all aspects of business - including the transfer to a new generation, the sale, or the operation of the company in perpetuity.

FAMILY-OWNED BUSINESSESFamily-Owned Businesses have been the drivers of our economy for a long time. We understand the significance of the family business structure, as well as the day-in, day-out efforts that have made an economic impact on both your local and the national community.

We understand the inter-relationships between the Goals of the Family, the Owner and the Business. Any one of these may impact the others in a significant way. We represent this with our FAMILY BUSINESS GOALS MODEL:

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