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By Wayne Rivers, CEO Family Business Institute

There’s a fair amount of discussion among family business commentators on the almost obsessive focus on exit strategy and succession planning for the family firm. Having a successful family business is a powerful force in family life. It is often the focus of conversation around the family dinner table or at family gatherings. The family business even captures extended family in its gravitational field; many times after the parent generation has died, the family business transfers to the next generation in line.

When family business owners do their estate planning, the family company and the succession of the business is the single most important topic of discussion. All other estate and tax planning concepts are secondary. The family business, in short, has been the focus (if not the obsession) of the entrepreneur’s daily life 24 hours a day for perhaps 30 or 40 years. Tom Campbell of The Family Business Institute says that creating a successful family business is the closest that a man can come to giving birth.

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By Charles Laverty, Jr., ASA, CBA, CFFA

Demographic experts predict that more than 50% of privately owned businesses will change ownership in the next ten years and this will represent the largest transfer of wealth in U.S. history.  However, approximately 75% of business owners do not have a formal business succession plan in place.  The business succession planning tsunami is approaching. 

A business succession plan is a comprehensive roadmap that assists business owners in successfully and profitably exiting their business based on their personal and financial goals.  Throughout the life of a business, owners need to plan for the next generation to achieve proper business continuity.  As the baby boomer population begins to enter retirement, this issue becomes increasingly important.

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Edwin I Grinberg, J.D.

You have worked long and hard to build and grow your business.  It’s reached a level where you’re no longer worried about its survival but more about how to sustain and continue a growing business.  Now, it’s time to start protecting what you’ve built, as well as protecting yourself and your family.  You own 100% of the business and are concerned that when the time comes to convert your life’s work into cash for your retirement, you will have a difficult time finding a buyer willing to purchase your company for fair market value.  How might you plan an exit strategy today for this inevitable problem facing you in the future? Futhermore, what kind of business exit strategy concepts can you employ to ensure a successful departure?

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By Wayne Rivers, CEO Family Business Institute

 It’s 7:30 p.m. when you burst through the door clearly tired and frustrated. The children have already eaten, but rush to you, eager to share their joy that you are finally home. You barely acknowledge them as you  put a big stack of work on the table.
“Rough day,” your spouse asks?

“You wouldn’t believe it,” you reply. “The shipping department failed to get the Osborne job out last night like they were supposed to do, so our number one client threatened to cancel his business with us. I spent half the day trying to calm him down. Our biggest shipper is three days late with parts we need to finish four jobs and one of our trucks broke down 100 miles from here. It was a miserable day.”

If you are one of the children in a family business who hears this recitation, how would you feel? If you grew up hearing similar complaints night after night, how much enthusiasm would you have when your mother or father asked you to come into the family business?  Bringing children in to the family business and, later, succession planning may depend on your children’s memories of how you dealt with the stresses and rewards of the family business.

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