Great title for an article, right? A great topic, too … if only it were possible to know if and how early preparation saved a family business. But there isn’t. There are simply too many unexpected twists and turns, route changes and reboots in every transition journey to know that early preparation is the one thing that prevented a family business transition from becoming a catastrophic failure. What we do know is that longer planning runways dramatically increase the odds of successful family business transitions because long runways give owners
“If you don’t know where you are going, you’ll end up somewhere else,” so said Yogi Berra, the man The Economist magazine named in 2005 as the “Wisest Fool of the Past 50 Years.” As far as we know, he was not talking about family business transitions, but his words certainly apply. Through long experience guiding owners, we’ve found that preparation is the best way to increase the odds of transition success. In this article, we share with you five key steps in preparing a family business for transition. Step
Navigating the complicated terrain of private and family business transitions is both an art and a science for everyone involved: owners, successors, their families, and us, as Transition Guides. On the art side of the equation are experience, intuition, careful listening, open-mindedness, humility, confidence, humor, and the attitude that others have the best of intentions. On the science side are setting and prioritizing goals, choosing a transition path, assessing family members’ preparation, willingness and ability to transition successfully, and preparing successors to lead. Today we want to introduce you to
As a family business owner, if you could create a training ground that could: Preserve family relationships, Give your successor the opportunity to learn new skills, Give you the opportunity to learn to mentor, Protect your business, Alleviate the worry of losing control, and Minimize miscommunication, would you jump on it? For most owners, the answer is an emphatic “yes!” And yet, when we suggest to these same owners that, in anticipation of a transition of ownership to the next generation, they implement some form of formal governance for their
Transitioning ownership of a business is a journey, most obviously for the person transitioning out of ownership (the transitioner). Less appreciated, perhaps, are the challenges a successor encounters on the journey to business ownership. Read about the successor’s transition journey. We’ve written frequently about some of the transitioner’s challenges (e.g., preserving relationships, cutting the ties between owner and business, mentoring successors, to name few) and dilemmas that transitioners encounter when turning over ownership. In this article we focus some of the challenges successors face and how we help transitioners and
The first question most owners wrestle with when they think about the future transition of their businesses to successors is: How much will your company be worth in a business transition? How much is the business worth and how do I figure that out? How much will my business be worth if I sell at the right time? How much at the wrong time? How much do I need from the transition of equity to achieve my financial goals? How much do I deserve from the transition in return for
There are many ways to put your family business in the hands of successors: sales of equity or assets, gifts of equity or assets, or some combination of these. There are pros and cons to every method and gaining clarity about which is best for your situation begins with answering five of The Big 6™ questions that come before the question of How will your transition your family business to successors? They are: Why? What? Who? When? How Much? How? All six questions are interrelated. For example, the timing you
One of the ways we help owners lay the foundation for a succession plan that achieves their objectives is a tool we call The Big 6™. When owners answer these six questions, they begin to chart a path to the transition they desire. The Big 6 questions are: Why, What, Who, When, How Much, and How. (Click here to read more about the questions.) When is the best time to start planning a family business transition? SCHEDULE A COMPLIMENTARY CONSULTATION Today the topic — or the question — is When.
As we near the end of the year, we’ve been thinking a lot about all that’s happening in our world: two wars, presidential primaries just weeks away, periodic and predictable wrangling in Congress about the national budget, questions about the potential of artificial intelligence, the teeter-totter of will-there-or-won’t-there be a recession, inflation, and interest rates. We don’t know what 2024 will bring, but we do know that it will bring more of the same: constant change. SCHEDULE A COMPLIMENTARY CONSULTATION Yet, two issues in our world of business transitions continue
