Is Yours A Family First Business Or A Business First Family
Transition Companies Business Succession Ideas by Gene Sartin
Gene Sartin, CEO of The Transition Companies identifies a vital question that needs to be addressed prior to beginning any Family Succession Plan. Is yours a Family First Business or a Business First Family? The answer to this question may greatly change your thoughts about the Business Succession Planning Process.
Gene Sartin always advises each family member to ponder the many personal sacrifices that the business founder embraced in order to create a successful enterprise. These sacrifices may have included overtime, missed family functions, children's birthdays, and family holidays. This is a Business First Family. The second generation might desire to change much of this. Succession Family members may want to leave the office early in order to have more family time, may want to become involved in community functions or take weekends and holidays off. This is how a Family First Business functions.
At the Transition Companies, we remind all Family Business Members of the following. Every family considering Family Succession should pinpoint vulnerable areas where change may be desired. The creation of an Advisory Board is the single best strategy for succession management. Business Valuation is a must for any family succession plan as well. An updated Valuation should be part of the regular yearly strategic planning routine. A contingency plan should be developed with measures to implement in the face of death or incapacitation of key family business managers. A shareholder agreement should be created, which would be needed in the estate planning process. Buy-sell agreements should also be considered, as they are a specialized form of shareholder agreement that deal with ownership transfers. Retirement calculators are suggested to establish and maintain preservation of retirement savings.
At The Transition Companies we suggest that the best way to tackle any problem is to identify hurdles to face before they come up. Every contingent problem should be Analyzed and then embraced. Gene Sartin points out that many times in life, the greatest headaches come from challenges you just didn't notice at first. Family Succession Planning and Business Succession Planning should be looked at in exactly same way.
Selling the family business, Gene Sartin notes, could be the best avenue to building and securing family wealth. For many family owned businesses, planning how to leave the business to the next generation can prove to be an uphill climb. Here at The Transition Companies we remind all parties that for most, this process occurs only once in a lifetime. Without a significant investment in planning, the succession process can be damaging to both business and family. Gene Sartin reminds all that Exit Planning is paramount because you will one day transfer your business interest. It will happen either during your lifetime, or it will be done upon death or incapacitation. There are, indeed, invaluable ways to avoid an unexpected forced liquidation. The Transition Companies can help families maneuver through the vitally important Family Business Succession Planning Process.