Plan for Business Succession

Having come from a family construction business, my own environmental management business working with the marina industry, having worked with numerous businesses in developing team leadership and organizational strategies, and now teaching a course on family business management I am learning a lot about what makes family businesses successful and those that do not.

Family businesses have a lot of competitive advantages, many referenced by others who have responded to your recent article “Family is Everything,” such as a consumers perception of trustworthiness, deep understanding of the business developed across generations, shared values, a long-term perspective and an appreciation for patient money. But rarely do we hear about the 70% of businesses that fail in the transition from founder to second generation.

The lack of planning for succession, of “starting with the end in mind,” from early-on, is probably the number one killer of a family business.

It has to be the head – of the family and the business – to lead the succession planning process. Often, though, the focus of the founding entrepreneur is to achieve viability for the business; and most likely they have never gone through a succession process before, which means it often does not get thought about until opportunities have been past.

The founder of the business may also be delaying any succession planning because of an emotional attachment to the business they created, not having trust in their offspring capabilities, or lack interests in other things besides the business.

A stewardship perspective – of being responsible for the business from one generation to the next – will help preserve the management of the business and the family wealth.

About Rick Raymond

Rick Raymond operates Richard Raymond Associates, Inc., an Executive Leadership firm dedicated to helping business leaders maximize performance. Rick comes from a family of small business owners - his grandfather and great-grandfather were small business owners, and he grew up listening at the dinner table to his father’s conversations about his construction business. Rick has a graduate degree in marine biology, and spent three years in the Peace Corps, working with the Chilean National Fisheries Development Institute where he worked on a fishing boat offshore of Cape Horn on the southern tip of South America. Rick then worked for Cornell University, educating teachers about the oceans. While in this position he led the effort to start the New York State Marine Education Association. Afterwards, working for the New York State Legislative Commission on Science and Technology, he started BrooklynWorks, a not-for-profit regional business-to-business exhibition to promote small business and manufacturing in Brooklyn, New York. Coastal Consultants, which he started in 1984 and sold in 2006, provided environmental planning, regulatory, engineering, and construction management services.

One thought on “Plan for Business Succession

  1. Smart business owners do not delay succession planning for any reason.
    Why would you want to give your assets away to the government?
    If you do not have a plan, call your attorney NOW and get the ball rolling.
    Best, Ed Lofgren 3A Marine Service, Inc. Hingham, Ma.

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