When it comes to family businesses, owners are generally more focused on building a legacy for their successors rather than spending the time necessary to plan for the transition. Hours of work are spent addressing the immediate needs of the business while planning for the transition is set aside for another time. This delay can create problems down the line when an owner decides that it is time for him or her to transition from the business. Paying close attention to the following considerations will help you ensure that your family business is ready for that transition phase and new leadership.Read More
When I was fairly young (at which time my kids assume dinosaurs roamed the earth), I would play chess with my grandfather when we visited his house. To be honest, I really didn't remember these games as he passed away when I was in high school. Years later, my grandmother gave me a chess set that my grandfather had commissioned from a woodcarver in Italy. She told me that my grandfather wanted me to have it since he fondly remembered our games. My brother, who never played with my grandfather, got squat.Read More
The best place to start in terms of wrapping your arms around family business succession planning is with the retiring owner’s financial security. What are your objectives? By establishing clear goals, an advisor will be able to quantify success.
What does this mean?
Start managing yourself in the same manner as you would your business. Personal financial statements are a great place to start. When running a business, you create balance sheets and an income statement, so you should do the same with your personal finances. You want to be able to enjoy your retirement without having to worry about where your money is coming from and how long it will last. Analyzing both your financial statement and income statement will give you peace of mind.Read More
The best thing about the whole family business succession planning process is that nothing you’re doing here is irrevocable. Remember to keep in mind that it’s a dynamic process – something that’s going to change and evolve over time.Read More
Overcoming inertia and making the overall process manageable are the two most difficult aspects to tackle when getting started with family business succession planning. This can be a very overwhelming task simply because it is not just a matter of “let’s just do it.” Successful succession planning requires that you put thought into what happens once the business is no longer in your hands. What will you do now? Are you required to step in if the business falters? Essentially, there are a lot of “what ifs” that need to be taken into account prior to the succession of your business. Putting a detailed process together will however take some off the stress off your shoulders once the succession occurs.Read More
Family business succession planning is not an event – it’s a process that evolves over time. In order to create the most effective plan, you need to recognize it, address it, and implement it as a process. Below are the two main actions to take when beginning the family business succession planning process:Read More
Some stakeholders in the business succession planning process are obvious, such as family members and employees who are involved in the business. Besides those people though, who else’s interests, wants, needs and desires do you have to consider when you’re looking at the family business succession planning process?Read More
Topics: Family Business & Succession
There are many considerations that a business owner must take when planning for the succession of their business. These considerations can weigh heavily on an owner, but are important to think through as the business succession planning process begins.Read More
Business succession means many things to many people. At it’s core, it is the orderly transfer of a business owner’s interest from one generation to another. However, “orderly transfer” is much easier said than done. As illustrated in the graphic below, as the business moves further and further down through generations, the percentage of successful transfers decreases. For a country where 90% of our businesses are family-owned, this low success rate is grim.Read More