Five Questions With: Don Troppoli

Don Troppoli is senior vice president and regional manager of business banking at Webster Bank. / COURTESY WEBSTER BANK
Don Troppoli is senior vice president and regional manager of business banking at Webster Bank. / COURTESY WEBSTER BANK

Don Troppoli, senior vice president and regional manager of business banking at Webster Bank, specializes in business succession planning. He talks with Providence Business News about why small business owners should have succession plans, why it’s difficult and how that changes between family- and non-family-owned businesses.

PBN: Can you tell our readers a little bit about why succession plans are important for small-business owners?
TROPPOLI:
Succession plans are important for small-business owners because most of their wealth and earning power are tied to the business. Forming a solid temporary or permanent succession plan prepares your business to continue to build wealth and generate income if for some reason you are not there to run it. The process of developing the plan often reveals key risk points in revenue generation and operations that need to be addressed either for a short-term situation or in preparation for a sale of the business.

PBN: What are the biggest challenges associated with succession plans for both family- and nonfamily-owned businesses?
TROPPOLI:
The biggest challenges associated with succession planning for family-owned businesses can center on ownership transfer and operating control between generations or siblings if multiple family members are involved. If there isn’t conceptual agreement on the succession plan among the stakeholders in the family, breakdowns in the communication and inter-relationships can have negative effects on the business and can ultimately lead to the business failing. Nonfamily owned businesses face the challenge of not having a ‘ready-made’ buyer to transition the business unlike a family-owned business that can be passed down to the next generation. Finding that suitor can be difficult and time-consuming. The right buyer, willing to pay the right price, can take years and the thought process around that should begin long before an owner is ready to sell.

PBN: Does the bank see a niche – or significant growth potential – in business-succession planning?
TROPPOLI:
Given the significant number of businesses owned by individuals who are getting ready to retire, I would say that there is an increasing need for business succession planning and that the need for financing to facilitate a sale is on the rise. These are complex, often emotional transactions that can take a lot of time and effort. Working with a financial partner that has expertise in acquisition financing and a solid track record is critical to the process, and I believe as a bank we are very well-positioned to be that partner.
PBN: A recent report shows that very few business owners have succession plans in place. Is that true for Rhode Island and the region?

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TROPPOLI: Certainly fewer businesses have succession plans than ought to, but I think that is the case more broadly than just Rhode Island or regionally. Working in banking and finance for many years on the West Coast, I found that to be the case there as well. The challenge for many owners is that just running the business is more than a full-time job, and so the succession planning ends up staying on the back burner for far too long.
PBN: If a business owner is looking to create a succession plan, why should he or she consider working with Webster bank?

TROPPOLI: If a business owner is looking to create a succession plan or visualize how they might eventually sell their business, they should consider working with Webster Bank because we have the experience and we’re good at it. Typically, we will meet with the owner(s) to understand their financial goals. We analyze the financials, including the operating performance, the financial condition, the composition of their revenue, the margins, the industry they serve and other key elements of the business. We can sketch out how the sale of the business can be financed and how that might be structured. If SBA financing is needed, our capabilities in that arena are also very strong. In short, working with Webster Bank means you will be working with experienced professionals who can give you straight answers. Bankers who will work hard to pull the transaction together so that you can enjoy the fruits of what may have taken years or even decades to create.

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3 COMMENTS

  1. Don is a national treasure… he speaks with such intensity and his words carry such weight. Truly insightful I could read an entire novel constructed of Don’s nuggets of wisdom.

    Truly inspirational keep up the good work.

  2. I would certainly agree with the last comment about Don Troppoli… That it’s his nuggets that really stand out. His deep blue eyes stand out as well against his pale blue shirt. Keep it up Don!!

  3. I would certainly agree with the last comment about Don Troppoli… That it’s his nuggets that really stand out. His deep blue eyes stand out as well against his pale blue shirt. Keep it up Don!!