FAMILY  BUSINESS  SUCCESSION  PLANNING

Who will run the company?  Who will own the company?

Who's going to run the business when you’re no longer there?   How will ownership be successfully transferred?   Will your business even carry on?   Family business succession planning addresses these questions to create a smooth transition between you and the future owners and managers of your business.

Only 30% of family businesses survive into the second generation.   No more than 12% make it into the third generation.   Often the lack of proper succession planning is the key reason why the family business failed.

The biggest killer of family businesses is silence.   Most families never directly talk about succession.   Of those that do, most think of succession planning as three issues: management, ownership, and financial.   Left out of the discussion is the reality that all succession planning is fundamentally emotional.

Our Approach

Our unique strength is in navigating the emotions and conflicts surrounding family business succession planning.   With our deep understanding of family dynamics and the role that conflicting loyalties and emotions play, we facilitate the discussions, untangle conflicts, and develop effective solutions.   Solutions that will have the buy-in from all family members involved.  We guide your family through the maze of succession planning.

Your accountants and lawyers provide invaluable advice about the best tax and legal strategies for your company.   Insurance advisors may need to get involved as well.   We work closely together with all these professionals to develop the best possible succession plan for your business and your family.

What We Know

• Start planning and start early
  Open the discussion.  Most families don't talk about a plan for the continuance of the family business.   Even fewer complete a plan that can be successfully carried out.   Developing a good plan takes time, often years.  The sooner you start with succession planning the better.   Begin discussing the issues before a crisis.
• Involve the entire family
  Successful planning includes all family members in the discussion.   Make sure attention is paid to the personal feelings, ambitions and goals of everyone concerned.
• Be realistic and plan accordingly
  Perhaps the oldest son is expected to run the business, but does he have the skills and experience or even the interest?   Another family member may be more capable.  Perhaps an outside manager needs to be found.   Evaluate the strengths and weaknesses of all possible successors objectively.  The needs of the business must be considered first.
• Not everyone is equal
  Management and ownership are separate issues.  Owners don't have to run the business and the managers don't have to own it.   Perhaps the successor will run the business as the majority owner.   Or ownership could be distributed among family members, with the responsiblity for running the business given to an outside manager.   A distinction may have to be made between those family members involved in running the company and those who are not.   Financial "fairness" for all family members must be thoughtfully considered.   Each family business is unique in their own way and requires an individually crafted solution.
• Mentor your successor
  How can your successor take over and run your business successfully if you haven't spent any time mentoring and preparing him or her?   The business succession has a much better chance of success if you work with your successor a sufficient amount of time before handing over the reins.
• Get outside help
  Your lawyer, accountant, and insurance advisor can help you put together a succession plan.   However, don’t ignore the emotions and family conflicts that play critical roles in the success of your family business succession plan.   Silence, not talking about succession, ignoring the emotions and conflicts in the family, these are the main reasons why family business succession planning often fails.   This is where our expertise and years of experience are essential to help you resolve the emotions and conflict situations that hamper the discussion about succession.

If you want to pass your family business along to the next generation, putting off succession planning is not an option.   Stanislaw Consulting can help.  Contact us to find out more.

For an interesting perspective about family business succession planning, we suggest you take a look at the book Every Family's Business by Tom Deans.