August 7, 2017 --  How to screw up Succession Planning

           "What the studies say"

Price Waterhouse, Family Business Magazine, Family Firm Institute
and others state that thousands of family businesses go out of business every year. In 2016 over 950 Jewelry stores went out of business. Not long ago over 800 trucking firms went out of business in one year. Manufacturing, retail, construction etc. are all losing family businesses. Yes, some, a few, go bankrupt. A few are bought by inside or outside sources, but most seem to raise the white flag and just fade away. 

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         "What is the reason?"
Most senior generation wait too long to begin the process of succession planning. "We have time, I don't know if they want to come into the business, they aren't ready, what will I do if I am not involved in the company? Where will my retirement income come from? etc. etc." Poor planning, poor preparation by all generations, the lack of separation of ownership and management, family emotions and lack of communication are among the top reasons for these family business failures. Over 70% of family business owners state they desire to pass on their business to family members, yet only 30% actually do. When you are talking the possibility of 16 million family businesses, that 70% is a lot of family business lost forever in the years to come. Will yours be next?
         "When is the right time?"
Succession planning is a process not an event. It should begin when your company starts to make money. That is when you need to begin to think of the future. You will go through many wills an d estate plans. You will need help dealing with the personal/emotional, operational, financial and legal ramifications of being in business and as a potential family business. When family members enter business full time, you need to identify what you want out of the business, what you want for your heirs and what is the best possible way to help them succeed. This is where many family businesses fail. They wait too long, and don't do the proper planning and preparation of themselves or their successors for what is to come. Waiting has created way too many statistics for families in business. It can negatively impact your income, end a legacy and even strain family relationships of those who had hoped to make the business a career. Now is the right time to begin planning. Don't wait until you are gone. Let another become part of the statistics.
             We can help you figure it out - we have for hundreds of families in business.
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Kwaiserism - "Procrastination leads to ... NOWHERE"