The Seven Goals of Business Transition
When it comes to succession planning, the Northwest may be the country's most evolved region. Maybe it's all that Microsoft money looking for a home, or maybe it's the waters of the Columbia racing toward the Pacific. Just take a peek at the Estate Planning Council of Seattle (www.epcseattle.org), which fosters collaboration among the many disciplines of its membership.
Appropriately enough, three of its members--Greg Amundson and Monte Scott of Avastia Business Transition team (see main story), and Ron Dohr, of Dohr Family Business Consulting in Edgewood, Wash.--have compiled a list to help guide a successful business transition. (A longer version is available on Avastia's website).
- The business can support the family. The family business must be large enough and profitable enough to provide financial support to the next generation.
- The family can preserve the business. To build a lasting legacy, junior family members must be developed to lead and grow the business.
- Peace of mind for the owner. A good business transition plan anticipates future management needs and trains future leaders so the owners can step back and enjoy peace of mind--without worrying about the future of the company (and their retirement).
- Financial security. A tragic and common scenario is that the senior generation transfers the business to the junior generation, counting on this to provide them with retirement security--only to see the business fail. A successful transition plan must include coaching the next generation to build on the founder's efforts.
- Transfer of knowledge and wisdom to successors. The founder's knowledge, leadership skills, and intellectual property must be transmitted to the next generation long before control and assets are transferred. Many owners find their aspirations of a more leisurely lifestyle delayed as they spend unexpected years transferring their wisdom to their successors.
- Eventual transfer of assets to heirs-not the IRS. Most business owners are unaware that if they fail to design a succession plan for themselves, the IRS has one waiting for them. A successful business transition plan provides a means to pass the assets to the heirs, not the government.
- Family harmony. A business is only a business. You can buy a business, you can sell a business. But your family is irreplaceable. What is the point of having a family business if it doesn't include harmonious relationships among family members?
Share this Feature
Comments:comments powered by Disqus
- Multi-Unit Franchising
- Get Started in Franchising
- Open New Units