The Challenges of Succession Planning
September 2018 | Volume III
Through its life-cycle, a Family Business will face many challenges. Some of them are inherent to any business, others are specifics to family business dynamics:
Intergenerational differences
Family conflicts
Estate administration and management after death
Attracting and retaining talent in the family business
Passing the torch
While dedicating time to grow a business is important, preparing for the inevitable *life after* is just as important. The planning of a successful succession should start as soon as possible and should address the following topics:
Business Valuations
Valuating the business is recommended and is the initial step to establishing a plan; it is used for determining the value placed on the business in question.
Corporate Governance
Corporate governance continues to define solid management accountability to an organization. Policies and procedures may have little value to the business founder, but a potential buyer will want to acquire a company with solid operational policies. Formalizing the ‘unwritten’ rules in a family business brings the family business to a level that is more attractive to a buyer…even if the buyer is Family!
Intergenerational Differences
What drives today’s Generations X & Y is vastly different than what drove the Baby Boomer Generation to succeed. Understanding the difference between how the “children” are motivated, compared to the “parents”, may make the difference between passing on the business to a family member or having to sell to a 3rd party.
