When It Comes Time to Decide Who's Taking Over the Family Business...

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One of the toughest decisions anyone in a family business will have to make is deciding who will take over the business when the time comes. Often times, this is where conflict arises. What if there isn’t a second generation to take over the business? Or maybe there is a second generation but they aren’t yet ready to the take over the business. What do you do?

Here are some options and scenarios, provided by US News, from family business consultants to consider if this happens to be a decision your business needs to make.

If there is no "next generation" to take over:

• Sell to Employees. It is best to try and sell the business to people who work for you if there is no one to take it over.
• Sell to a Third Party. If no one within the company wants to purchase the business, sell it to a third party. In this scenario, you would sign an agreement of sale, or an asset purchase agreement.
• Create an ESOP (Employee Stock Ownership Plan). An ESOP provides every employee with stock ownership in the company and is essentially a type of pension plan. Although this takes care of the monetary side, an ESOP won't solve the problem of who's going to run the company after you leave.

If you don’t think the next generation is ready:

• Assemble Advisers. You might not think the next generation is ready to take the reins, but you're not the most objective person to make that decision. Hire a team of advisers, like Continuity Family Business Consulting, to assess the situation and evaluate the younger generation's readiness. Advisers/Consultants don't advocate for either generation, but advocate for what's best for the business. It's a perfect balance point between the needs of the generations and the needs of the business.

   Is your family business ready to sell? Do you have a generation lined up to takeover? Tell us on the Continuity Family Business Consulting Facebook page, linked HERE.

Experiential Learning & Family Retreats with Continuity Family Business Consulting

CONTINUITY

FAMILY BUSINESS CONSULTING

US/CANADA: 877-925-5149 INTERNATIONAL: 1-617-500-3110

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Getting family stakeholders together on a regular basis to share information and experiences is important in building strong families and family businesses.  A strong agenda and expert facilitation helps these meetings become most effective. 

From large inter-generational groups to smaller groups of sibling managers and spouses, retreats offer great ways to get new perspective, and renewed energy, to address the challenges of a new year or a new situation. 

While we are available to facilitate such meetings in a location of our clients’ choice, there is a unique advantage to visiting us in the Boston area.  Continuity has developed specialized programs with a leading experiential learning organization in the Boston area.  We provide challenge courses and cooperative games to teach teamwork, develop trust and improve communication through metaphorical learning.  These full day programs offer family members of all ages, opportunities to participate in a variety of challenging experiences involving ropes courses and games.  It’s a different kind of retreat which aims to be deeply enriching, memorable and a lot of fun.  Please contact us for more information.

For more information, visit ContinuityFBC.com. 

Passing Your Family Business from One Generation to the Next...

CONTINUITY

FAMILY BUSINESS CONSULTING

US/CANADA: 877-925-5149 INTERNATIONAL: 1-617-500-3110

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Family businesses are often considered incomparable to entrepreneurship. However, family businesses account for nearly 80% of the enterprises in North America. Less than 60% of them survive to the second generation and only 12% survive to the third generation. 

Many question the reason as to why this often occurs. Prof. Matt Allen, an expert in family business, may have some insight for this question. He highlights that many family businesses are characterized by efforts on the part of ownership to balance financial performance with maintenance of family control and benefits for future generations. Focusing on both family and financial performance can seriously complicate the planning and decision making processes on the business side.

He also notes that if family businesses want to survive and grow into the future, they need to pass on the entrepreneurial mindset and capabilities to create new streams of wealth across generations, not just pass the business on from one generation to the next. This tactic is often referred to as “trans-generational entrepreneurship.” 

It is well known that family businesses focus on maintaining ownership across multiple generations and benefit from long term relationships both inside and outside the business. It is often asked how family businesses transfer the knowledge and entrepreneurial mindset from generation to generation? The answer lies within who holds the top positions. Many top leadership positions in family businesses are often filled with family members who have the leadership and organization to access important knowledge and social resources.

Remember, when leadership transitions are occurring in your family business, the new generation should be mindful and conscious to maintain and build on the networks and knowledge the businesses former leaders.

Contact Continuity Family Business Consulting for more information and guidance on passing the family business from one generation to the next! 

Family Meeting Facilitation with Continuity Family Business Consulting

CONTINUITY

FAMILY BUSINESS CONSULTING

US/CANADA: 877-925-5149 INTERNATIONAL: 1-617-500-3110

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Meetings with stakeholders of family businesses can be difficult and risky, whether they are in the board room or the living room; with family or with key non-family members and advisors.  Such meetings can often begin casually and escalate into conflict.  Or, they can be well planned but still not accomplish their intended purpose.  

Continuity’s experienced advisors help stakeholders prepare and hold effective meetings and help them be better prepared for the inevitable impromptu meeting.

 

We accomplish this by helping all stakeholders:

• better understand their roles in the family business 
• better understand the mechanics of running successful meetings
• create appropriate venues and practices to talk about difficult or conflictual issues
• build alignment of strategic goals and vision in both business and family 
• communicate better in business and with family

The importance of being able to hold productive meetings while managing the inherent conflicts among stakeholders in a family business cannot be overstated.  Meetings are how we get things done, how we grow relationships, and how we maintain alignment in our strategic goals and vision. 

Call Continuity Family Business Consulting today for more information about Family Meeting Facilitation.

Continuity's Blair Trippe Quoted in More Magainze's Quibbling Sibling's Article!

CONTINUITY

FAMILY BUSINESS CONSULTING

US/CANADA: 877-925-5149 INTERNATIONAL: 1-617-500-3110

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Continuity’s own Blair Trippe was quoted in a recent article published in More Magazine in an article titled Quibbling Siblings: Eldercare Edition.

On New Crisis, Old Roles:

Sibling relations start off as involuntary but in adulthood become optional. We can take them or leave them, and often we do leave, at least for a while, heading off to attend college or pursue a job or simply explore what kind of adult we wish to become. The family’s close knowledge of us usually ends when we exit the home, but their image of us continues, often becoming fossilized. “I have an 86 year-old Aunt, and because she was the youngest, everybody still considers her the baby,” says psychologist Caffaro. That inability to change position can be quite literal: Mediator Blair Trippe of Norwood, Massachusetts, says that when she works with families to resolve eldercare disputes, siblings typically choose the same seats around the conference table that they occupied at their childhood dining table.

On The Rewards of Reconciliation:

Most siblings manage to come through the caregiving experience with their ties intact or strengthened, experts say, but of course there are extreme cases in which relationships shatter beyond repair… but where there is something to salvage in a relationship, it’s worth the try. As Blair Trippe notes, siblings may refuse to speak for 30 years, but nobody’s really happy about it.

On Family Planning:

What if siblings can’t agree on how best to meet a parent’s needs? Hiring lawyers is usually not the best course… what’s more likely to help is family mediation. Also referred to as elder mediation, this is a time-limited, confidential, voluntary process guided by facilitators trained in helping families reach consensus through compromise… Though long-held resentments often come up, these sessions are not a form of therapy. “The goal is to make decisions,” says mediator Jane Ginsberg. “It’s not necessarily to mend a relationship.” That said, mediator Blair Trippe often sees a ripple effect. “In the short term, you’re getting everyone to deal with the situation at hand and catalyzing the group into action,” she explains. “In the long term, the family learns a language and communication strategy that they can apply with another parent or another decision.”

To read the full article, click HERE.