A family business seeks professional advice for a ‘business’ issue or problem. The solution suggested makes sense and a plan is agreed. The plan, however, is not implemented. Why?
...Because each family business is uniquely and intensely personal and, more often than not, the personal issues involved in that family business have not been adequately dealt with as an integral part of the’ business’ problem solving exercise.
The above-mentioned scenario will be familiar to many professional advisers who have grappled with the challenge of trying to help their family business clients tackle the confronting issue of succession.
Professional Advisers and Family Business Succession Planning.Although well placed to provide succession planning advice, professional advisers are not usually trained or equipped to respond to the complex and emotional problems that confront families in business. Advising families in business succession planning is a specialist assignment which is likely to involve all key family members and the family's professional advisers.
Each family business is unique -
there is no one solution fits all approach to succession planning. Time needs to be invested in getting to know and understand the family and business in order to develop a viable succession plan. Identifying the stages of development of the business, family, and individuals is an important preliminary step.
It may be advisable in certain circumstances to call upon a specialist family business adviser to assist with the process of bringing stakeholders to the table and to facilitate family meetings which address the family dynamics before the technical aspects of the succession planning process can be tackled.
A considered approach is important if resistance to succession planning is to be overcome. For the succession planning process to be effective, relevant family members must be willing to make the requisite commitment in time and effort.
The following 10-step approach addresses a number of critical issues which professional advisers should consider before embarking on complex succession planning assignments.
A 10 Step Guide to Family Business Succession Planning for Professional Advisers:- Identify your own goals and objectives in providing succession planning advice.
- Create a plan of action to achieve your own goals and objectives.
- Become ‘family business aware’ by understanding family business dynamics.
- Establish succession planning client selection criteria – who to approach.
- Decide how and when to approach clients who meet selection criteria.
- Schedule initial meetings with each key stakeholder – get acquainted.
- Get the key family members to meet and talk – discovery and assessment.
- Help family in business decide on a course of action and develop a plan.
- Help family in business document and implement the succession plan.
- Help family in business keep the plan current by review and update.
Note: The following article has been excerpted with modifications from Smyrnios, K. Romano. C. & Dana, L. Family Business Succession Planning: A 10 Step Guide. 2000 Centre for Professional Development to which readers are referred for a more detailed & comprehensive coverage of the ten steps.