Family Business Succession Process

Succession planning is the process of pinpointing key needs for leadership and intellectual talent throughout the organization over time and preparing individuals for present and future work responsibilities.

In a family business succession planning involves:

  • Strategic planning,
  • Financial planning,
  • Estate planning, and
  • Human resources planning…

…each at the individual, family and business levels.

Typically, family business owners consult with a variety of professionals in developing their succession plans — lawyers, accountants, bankers, financial planners, insurance advisors, merger and acquisition consultants and management consultants. Too often, these professionals find it difficult to proceed because their client has yet to make a number of personal and family decisions that will drive the planning process.

Preparing to Plan

Make Things Happen has developed a process designed to help family business owners address all of the key personal, family and business issues underlying an effective succession plan. Our process is not meant to replace the work of accountants, lawyers and other professionals — rather, to ensure that you have asked yourself all the right questions and considered all of the key issues before you visit these professionals.

Our goal is to ensure that your interests, your family’s interests and the business’ interests are equally well served, and to make you a more sophisticated — and efficient — consumer of the other professional services you will require as you prepare to exit your business.

The process comprises seven steps, each involving an exploration of several key questions.

Using words like "process” and "step” implies a prescribed order for your investigations. In fact, any of a number of situations can bring you to succession planning, so you can enter the process at any "step” along the way. These steps might be better seen as points on a circle, each one connected to all of the others.

However, there is logic to the order of these seven steps. We believe the true starting point should be your needs and those of your spouse. When you have a clear idea of what you want, then it makes sense to broaden the discussion out to include the desires of the rest of your family. Only when the family has developed a committed vision for its future in the business does it make sense to develop a strategic plan for the business to support the family’s goals.

1. The owner’s vision

  • How do you want to spend your "golden” years?
  • What will it take financially to live your dream?
  • Do you want to keep the business in the family?
  • Can you make the shift from "me” to "we”?

2. The family’s vision

  • Do members of your family have a vision for their own lives?
  • Does the next generation wish to own and/or operate the business?

3. Aligning the business & family strategies

  • Does the company’s strategic plan support the family’s vision and values?
  • Is the business positioned for long-term viability and succession?
  • Could the business survive your untimely death or disability?

4. Preparing successors

  • Which family members will enter the business?
  • Who will you prepare for succession?
  • How will you prepare them?

5. Leadership transition

  • Who will run the business?
  • How will you ease the transition?

6. Ownership transfer

  • When will the change in ownership take place?
  • Who will own the business?

7. Estate planning

  • How can you leave your family and the business in the best possible financial shape?

Simple Questions. No Easy Answers.

The questions are deceptively simple but the underlying issues are many and complex. Developing honest and realistic answers can take some doing.

A skilled facilitator with a deep understanding of the dynamics of the family business can help you avoid the assumptions and miscommunications that can threaten family harmony and the long-term viability of your business.

Make Things Happen can help you set up the structures and create plans that will prepare you, your family and your business for your eventual exit.

Please contact Make Things Happen for a complimentary consultation to see how we can contribute to your success!