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Part 2 of the "Process-Oriented Approach to Family Business Succession Planning" Blog SeriesIn my last post, I advocated a call to action…to overcome the inertia, rise to the occasion, and begin a process to overcome the odds stacked against the successful transfer of a closely-held business to its next generation of owners and operators by developing, documenting, and communicating a plan culminating with the orderly and successful transition of the business. So now, where does this often elusive process begin? The answer is simple--the process must begin with the senior generation of owners and operators who currently control the business. Whether a single individual, or a group of owners, the senior generation must start by facing the issues that will be important in defining the ultimate goals related to ownership succession, management succession, financial security, tax efficiency and family harmony. Let’s start with clarifying the current owner’s attitudes toward ownership succession. Whether the senior generation of owners built the business from the ground up, succeeded a prior generation of owners, or purchased the business from third parties, one of the greatest challenges will be who will assume the role of owner after their retirement? Unfortunately, there is no easily replicable formula that may be employed to assist the senior generation in answering that challenge because the critical factors in achieving success will vary greatly from business to business. I would encourage any owner or group of owners to begin by generating a series of questions designed to elicit the answers they believe necessary in setting the parameters for the next generation of owners. Though not exhaustive, some of the questions might include the following:
Answering these questions in a manner that balances the best interests of the business with deference to family harmony will provide an important first step in the journey to a successful transition. The next set of issues for consideration will address the current owner’s attitude toward management succession…so stay tuned! Read other posts in our "Process-Oriented Approach to Family Business Succession Planning" Blog Series: Part 1: Effective Business Succession Planning: A Call to Action Topics: Family Business & Succession When transferring the ownership of the business an entrepreneur can do?The three main options are: transferring ownership to a family member, transferring ownership to a non-family member or disposing of the business through a sale, management buy-out, management buy-in or voluntary liquidation.
What options should consider when planning for ownership succession?Generally speaking, there are six options for an owner when you longer want to own your company.. Move ownership to a family member. ... . Sell to a key employee. ... . Third-party sale to an individual. ... . Merger or sale to another company or private equity group. ... . Employee stock ownership plan (ESOP) ... . Sell assets and liquidate.. How do I take over my father's business?Taking Over the Family Business: The Basics. Use the succession plan. ... . Be patient. ... . Assess your skills. ... . Take care of company culture. ... . Maintain your credibility. ... . Keep the peace. ... . Consider the advice of your peers.. Who is the owner of more than one business is called?Answer: c. An entrepreneur who is the owner of more than one business is called: Portfolio Entrepreneur.
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