The DIY Keys to Family Business Succession Planning
family business succession and business development" hspace="5" vspace="2" align="left" /> From our experience, the most critical family business succession planning complications are not financial, not taxes, they may not be business related in any way actually.
These issues are influenced by your ability or perhaps the inability to have a discussion with your family members genuinely.
If you can talk out the issues, worries, goals, and also assumptions with every person affected by the judgements you’ll eventually make, you should have the basis for your family business succession plan.
The moment everybody’s on board with the prospective direction of the family business, 75 percent of the equation has been sorted out.
This is not the time to fret whether one family member’s desires or another is doable or not.
Trust me, when you’ve decided on what you want the future of the business to look like, there are plenty of attorneys, estate tax planning experts, tax accountants, succession planning experts, and Chartered Life Underwriters who are ready willing and able to carry out the technical component.
The family business succession process can be divided into 7 important steps.For starters, you can’t do this alone, which means you must be prepared to ask for help and then accept it, which for many of us this is the hard part.
I always hesitate to ask for help (advice) unless of course I am entirely committed in advance to go along with it. It would embarrass me along with the individual I asked if I just blew off their advice, the advice I had asked for.
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What works is when a small grouping of peers, not part of the family or the business, with no financial stake in the decision are part of a consistent discussion – a number of family business succession conversations. Then it’s not about a single person’s observations but a collective back and forth around just what has worked and what hasn’t worked for them.
Make sure you designate someone to help drive you through the family business succession planning process. After all. if family business succession planning was easy you’d already be on top of it and not wasting your time reading this article.
What causes it to be so universally frustrating is that typically no one is empowered to keep the process moving.
From my experience the very best person is somebody directly involved in the business, a family member that has the best interest of the organization at heart, and is willing to propel you, the advisers, and everybody else.
Setting the critically important objectives is the easy bit, when you understand what’s important to each and every one of you?
Take into account what your husband or wife wants, just what your heirs really feel is essential and what sort of opportunity you wish to leave behind for the next generation successors so they can keep expanding the company. And then look at what the situation is right now. From that point on it’s a process of negotiation inside the family, together with the advice of your peers and your advisors – to determine what’s possible to accomplish.
You will need to redesign the business to fit your collective picture for the future around the collective goals of the family. This is the role of your team of your professional advisers. Always remember, this is your business, your family, and your wish for the future.
You really know what you would like the end result to look like. My wager is that it can be done, if you’re committed enough to tell your advisors that you want what you want when you want it and if that doesn’t work for them, you’ll find other, better advisors. Keep in mind who is working for whom.
Memories really are short, therefore be sure that someone writes down agreements you and your family made as a result of your conversations as the discussions occur. Each and every note is a brick in the wall. Every decision is remembered and every little bit of progress leads to the next and the next. Don’t make the harmful oversight of waiting weeks and months and trying to remember who said what about what when and under which set of facts.
Set up a schedule for the family businesssuccession planning steps to occur because, even though family business succession planning goes on forever, it should not last forever. This is really a continual process, from generation to generation to generation, with the steps taken today affecting the family as well as the business several years from now. However, there are many family business succession events and benchmarks in the process. You will be linked to family business succession planning forever – but it is not a full-time job.
Plan recurring meetings to examine how well you’re progressing in order to keep the planning coordinator (the title we use for the man or woman you put in charge of the process) moving, keep the advisors on task, and provide a visible chance to put check marks in the boxes of the steps that were accomplished.
These kinds of family business strategy sessions keep the process on everybody’s mind, reassuring them that this is important and it is being attended to – not just something that gets rolled out once a year just to keep them quiet.
Naturally there does exist one more option, one you could possibly choose in the event you are not seriously interested in your organization’s future.
You can do nothing about family business succession, delay until it is too late, and let others control what ultimately happens to your business and your family.
Without planning and communication, you’ll be asking, “what happened, how did we get in this horrible situation?” rather than seeing the future you all secretly want.
There are plenty of family business succession strategies, but they are not unlimited.
And there are scores of family business succession planning experts who will help you complete the process.
Don’t let the future be the time when you’ll wish you’d done what you’re not doing now.
Get on with it!
Family business succession planning requires that you make the best decisions possible, to insure the most productive outcome. Effective leaders know that their best decisions are those made in collaboration with people whose success they respect and whose opinions they trust. Why not harness the power of your peers, to help you consider possibilities and alternatives about your family business succession strategy? Click here to find out how this is possible!
