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Succession Planning
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Intangibles are often significant
Founders of businesses come in two varieties. Some entrepreneurs build a business to provide for themselves and their families and do not develop an emotional attachment to their business. When it has outlived its usefulness or when an opportunity arises, they are happy to sell it. Other founders see themselves as establishing a precious family legacy to be passed down through the generations of their progeny. The feelings of the founder determine the destiny of the business. If it is to be a legacy, succession is survival. Succession involves many issues, both tangible and intangible. After the estate planning, consultation with tax attorneys, CPAs and insurance brokers, there are other less tangible issues that frequently require attention...READ MORE
Succession means choosing a successor
Choosing a successor to head your company may be the most important decision a founder ever makes about the business. It is difficult for a parent to make emotional distance, stay rational, and choose one child over another. Parents live by the admonition to treat all of their children the same; not to give one child a worldly, advantage that you will not offer to the others... READ MORE
Titles take on added meaning for family businesses
As part of structuring a succession plan, I once asked a third generation owner of a family business if he would consider relinquishing his COO title. Generally, a mild mannered man, he surprised me with his immediate sharp response: "Will you give up your Ph.D. title?" he shot back... READ MORE
Prepare to make the right choice
Choosing a successor is a delicate matter that often throws a business into turmoil. Parents are usually determined to love all their children equally and to treat them with complete fairness... READ MORE
Succession, Italian style
In 1972, Vittorio Merloni's father passed the family business to his three sons. At that time, the business consisted of three separate firms: a heating and sanitary products business, a mechanical engineering division, and a white-goods business. Each son received a separate business, with Vittorio receiving Merloni Elettrodomestici, which produces refrigerators, washing machines and dishwashers, a business he had managed for over a decade... READ MORE
Death is not always a drill
The current issue of Family Business Magazine has an article that describes a business owner who, once a year, announces that he is dead. He then watches over a kind of "fire drill"... READ MORE
More than issues are in the fight
...the way issues are dealt with is just as important as the content...
There is a way that the bitter fighting over impeachment between the two parties in the House of Representatives reminded me of the feeling I sometimes get when I listen to two branches of a family in business. It is so often a meandering fight where the content shifts from year to year or from week to week, but the tone remains the same... READ MORE
Handing over the reins
Business environment differs for founders & next generation
People start businesses for many reasons, but one of the most common is: "I don't want to work for anyone else." The entrepreneur, at the beginning, has a free hand in the running of the business. He or she is accountable to no one, engages in building something of substance, and also takes risks... READ MORE
Smooth succession requires planning
The primary principle of succession planning: start early. When the current generation of owner/manager turns 50 to 55, he or she should make teaching the next generation about the business their prime responsibility. They should teach the successors everything they know about the business to give them the best chance to take over the operation with the greatest possibility of success... READ MORE |
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