Are You Prepared For The Family Business Hurricane?
Family Business Perspective – By Dan Iosue
Transitioning a family business to the next generation can feel a lot like hunkering down for a tremendous storm. Just like the winds and rain that push the walls and windows of a home, so too can the anxiety and stress in the family business push many past their breaking point. Often, you know the storm is coming with time to prepare, but hoping the storm will pass gets in the way of taking action. And, the closer the storm gets, the less time you have to fully prepare. It is, no doubt, stressful considering the impact of the storm, but ignoring it does not change the inevitable.
Proper hurricane preparation includes gathering batteries for flashlights or they’re not of much use. Gas for the generator and the chainsaw, water for cooking and drinking, screws for the plywood, sand for the sandbags, etc. Preparing well in advance makes the task at hand less overwhelming and with enough time, you can not only double check your work, but also catch anything that may have been missed. Whereas waiting until the last minute gives you fewer options, and you potentially end up huddled together, riding the storm out and hoping for the best. This is not the soundest strategy and sets you and your family up for potential disaster.
Just like riding out a storm, ensuring that the family business grows successfully through the next generation takes forethought, preparation, and commitment to ensure longevity. Without fail, the foundation of the business and the family will take on the wind and rain of change. You must shore it up in advance by addressing multiple factors.
Like preparing for the big storm, business succession planning consists of various interrelated steps. Not all steps need to be done at the same time. However focused intentionality on the 10 factors of the Succession Matrix are vital to ensure you do not miss any along the way, as well as set yourself up for ensuring the legacy of the family business. Considerations need to include what your financial independence looks like separate from the business and how to build an environment to allow the next generation room to grow and learn. Family dynamics and communication will need to be functioning effectively to allow for the appropriate governance structures to be put in place. The business will need to be performing at a high level to allow for financial independence. A strong understanding of vision, mission and values will be necessary to guide the way for both the family and the business.
Rather than waiting until the proverbial storm clouds are on the horizon, act. Acknowledge that there is time to prepare. Take appropriate action in advance of the storm to greatly improve your odds of weathering the storm together and coming out of it a stronger family unit, with the business growing in value. Who knows, you might even enjoy the process along the way!
Dan Iosue is an Associate of The Rawls Group, a business succession planning firm. Dan specializes in dealing with the issues that must be resolved by business owners to implement succession strategies geared towards building business value. For additional information, visit www.rawlsgroup.com or call 407-578-4455