I think there are two reasons why there is now so much interest in planning for the future in family-owned businesses:

  • the baby boom generation, a significant percentage of the population, is heading toward retirement age, and bringing with it many businesses that were started 10, 20 and 30 years ago.
  • we’ve had 40 or more years of fairly good times in the US- some recessions and economic downturns, but no event like the Great Depression to wipe out people’s hard work.

What is involved in family business planning? Well, this is what it isn’t: it isn’t a package of documents run off a computer, to be signed by family members to transfer ownership of a business. What is it? It’s a process of learning what people want and don’t want; of helping them to understand how they can achieve what they want, and when they can’t achieve it; of helping families to remain close despite different financial situations and opportunities.

More than anything else, it’s a process of listening to what people think and hope to achieve. Most owners of family businesses are very intelligent, but not trained or experienced in how and when to pass on ownership or control of the business. The assistance we can provide is to be good listeners and then to apply our own experience in finding ways, through various planning techniques, to help families achive their goals. At that point, we might become involved in preparing estate plans and business transition plans, and in guiding owners through legal concepts in transferring ownership.

There are many pieces to the puzzle of successful family businesses. In future entries, we’ll review some of those pieces to see how they can help in making family transition successful.