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Letter to the editor

For hair salon owner, a succession story

After years of building his business, he had a nagging problem. Who would take over after he is gone? Now, he has a plan in place.

By TOM ZUCCO
Published July 9, 2007

Jim Botts, 51, who is fighting cancer of the throat, tonsils, and tongue, tells stories from his younger days as he gives his first hair cut since taking time off to fight the cancer.
	[Times photo: John Pendygraft]

ADVERTISEMENT [Times photo: John Pendygraft] Jim Botts, left, plans to transfer his hair business, Salon Jim Botts, to longtime friend Raymond Vence, 56 (right). [Times photo: John Pendygraft] Jim Botts gets a hug from stylist Charity Pinder, 30, on his first day back to Salon Jim Botts after taking time off to fight his cancer.

Jim Botts was in his late 40s, his St. Petersburg hair salon was thriving, and there were clients and inventory and a thousand other details to worry about. The question of who would take over his business if he couldn't was in the back seat.

And then he got sick.

The cancer was first detected in 2003. Botts had surgery on his neck, mouth and tongue, and doctors gave him six to 10 months to live.

Botts responded to treatment and went back to work, but two months ago, he learned the cancer had spread to his spine.

His illness sent him scrambling to set up a succession plan that would ensure Salon Jim Botts, the business he spent 20 years nurturing into a salon with 20 employees and $600,000 in yearly revenue, would survive after he was gone.

"At first, I didn't buy into it that I was going to die, " he said recently. "I just assumed I would keep running it. This was a reality check."

Botts, 51, is single and has an adult daughter who is not interested in the hair business. So salon manager Raymond Vence, a longtime friend, will assume ownership. The two have been meeting almost daily to iron out the details, and with the help of their attorneys, they recently formed a limited liability company.

According to the agreement, Vence will keep the salon name and continue the business as it was.

"Having a business is like a parent-child relationship," Botts said. "It's such a good feeling to know everything is going to be fine if I'm not here. All they the employees would have to do is come in the next day.

"Well ... maybe they'll take a day off."

Many small business owners rely on a will because of the flexibility to change it. But if the issue of who takes over and what happens to the assets is not clear, the matter often lands in probate court.

"Can it become ugly and drawn out?" asked Pinellas-Pasco Circuit Judge George Greer, who specializes in probate cases. "If it's a dysfunctional family, yes.

"But if you get a good lawyer beforehand who knows what he or she is doing, that person can lead you through this."

Greer, who presided over the Terri Schiavo case, said many probate cases involving succession come about not because the owner was ill and later died, but because of a sudden death, such as a auto accident or plane crash. Or the owner develops a disease like Alzheimer's that renders him or her incapable of decision-making."

One of the biggest considerations when ownership is transferred is federal gift or estate taxes. The U.S. Small Business Association advises business owners work with an accountant and an attorney to help understand the tax consequences of the transfer and develop a plan that provides stability, tax savings, and, most of all, peace of mind.

Although Botts is more of a host than a haircutter, he has one less worry -- what will happen to one of the things he loves most. His business.

"They tell me I'm dying of cancer, that it's not going to go away," he said. "That's a harsh reality, but I really am happy now.

"That's getting me through this ... knowing the name will live on after me."

Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247.

For more information about succession planning for a small business, visit the U.S. Small Business Administration at www.sba.gov, or call toll-free 1-800-827-5722.

[Last modified July 8, 2007, 23:23:41]