in black and white
Main menu
Home About us Share a book
Biology Business Chemistry Computers Culture Economics Fiction Games Guide History Management Mathematical Medicine Mental Fitnes Physics Psychology Scince Sport Technics

Beyend 401 small buisness owners - Jean D.

Jean.D Beyend 401 small buisness owners - Wiley & sons , 2004. - 274 p.
ISBN 0-471-27268
Download (direct link): beyond401korsmallbusinessowners2004.pdf
Previous << 1 .. 5 6 7 8 9 10 < 11 > 12 13 14 15 16 17 .. 98 >> Next

Succession planning is a complex process, especially in families with multiple siblings and spouses. Suggested background reading includes Working with the Ones You Love: Conflict Resolution and Problem Solving Strategies for a Successful Family Business, by Dennis T. Jaffee (Conari Press, 1990), and Passing the Torch, by Mike Cohn (The Cohn Financial Group, 1992). Online resources such as the Family Business Magazine web site (http://www.familybusinessmagazine .com) provide a broad range of useful family business background information. NetMarquee’s Family Business NetCenter ( includes 28 university-based family business programs, plus articles on succession planning.
Planning ahead is the best way to achieve your goals and a smooth transition of management and ownership of the business. To achieve a successful family business succession, I recommend the 1-2-3 approach:
1. Assess the current situation.
2. Articulate your long-term goals.
3. Develop a written plan.
Succession Planning 1-2-3
Step 1. Assess the Current Situation Objectively Assess Family Members’ Roles in the Business.
Being objective about family members is difficult to impossible. Many family business owners find it helpful to have outside advisors assist them on this process. To get a picture of family roles in the business, Worksheet 5.1 expands Worksheet 4.1 to include a family role. Completing the worksheet will give you a picture of the current situation.
With this information, you can look for the answers to some critical questions:
• Do family members have clear roles and responsibilities?
• How can I objectively evaluate the performance of family members?
Worksheet 5.1 Employee Data Table— Compensation and Performance Information
Employee Name Date of Birth Date of Hire Position and Family Role Hours Base Pay Benefits Performance Assessment? Developmental Needs?

Family Business?
• Do nonfamily members respect family members for their contribution to the business?
• Are there conflicts among family members that affect the business?
• Do family members feel fairly treated?
• Are family members fairly compensated for their contributions to the business?
• How does family compensation compare with nonfamily employee compensation?
Assess Whether Family Members Can Successfully Run the Business. Based on your answers to the preceding questions, you can make an informed judgment about whether it is realistic to transfer management to family members. No matter whether you plan to transfer ownership to family members, it is critical to develop a succession plan. Without a plan, a smooth transition is unlikely. In the worst scenario, it can severely disrupt business operations and even result in a serious legal battle.
Step 2. Articulate Your Long-Term Goals
Planning for your succession is never easy. Your goals should drive the planning process. Hence, articulating your long-term goals is a critical step in the planning process. Answering the following questions will help you establish a framework for planning:
• Do you plan to retire? At what age?
• Do you plan to transfer ownership and/or management within the family?
• Do you plan to transfer ownership and/or management to employees?
• Do you plan to sell the business?
Succession Planning 1-2-3
Step 3. Develop a Written Plan
A written succession plan provides for the orderly transition of ownership and management of your company. The plan can be reviewed, discussed, and revised over time. It is essential to put the plan in writing because people have selective memories and memory fades with time. The importance of communication, and more communication, about the plan among family members cannot be overstated.
The written plan becomes a road map for the parties and can be invaluable in the event of a crisis such as owner illness or death. The absence of a plan can be a financial disaster for your business and your survivors. So, think of your succession plan as a critical element of your estate planning. It is truly a kindness to your survivors to lay out a plan that minimizes disruption to the business, their primary source of income.
Use Experts for Legal and Tax Advice. There are many ways to structure your succession plan. The company can redeem (buy back) your stock over time giving you a nice retirement income. Or, there can be a buyout by others, family members, employees, or a third party. You can transfer ownership, but retain control by using nonvoting stock. Because of complex tax and legal issues, expert advisors should assist in developing the succession plan.
Use Compensation as a Tool to Achieve Your Goals. Compensation is a key tool to developing and retaining key employees, both family and nonfamily. Taking another look at Worksheet 5.1, what compensation changes are needed? Which employees are critical to retain? What is the mix of family and nonfamily employees? What incentives do you want to put in place?
Previous << 1 .. 5 6 7 8 9 10 < 11 > 12 13 14 15 16 17 .. 98 >> Next