A business transitioning from one generation to the next faces significant obstacles. In my experience, what makes this subject so challenging – is that there is no standard set of rules, guideposts, or handbook, and maybe no professional advisor relationships to guide the process. As a financial advisor to business families for over 30 years, I strongly suggest that if you’d like to be a multi-generation business, start early, and set a clear succession plan.
One of the best things you can do for your kids (and the business) is to consider having them work for someone else before they take a management role in your firm. This experience can potentially add new perspectives and business intelligence when they join the family business. Even if your kids are working for someone else, they can still begin informal training in your company. Real-time training and exposure to multiple facets of the business is essential.
Rather than thinking of succession as an event that happens on a designated day, consider it as a process that occurs over an extended period of time – and integrates the following three elements: leadership, governance, and ownership. The successor to the family business will require a guiding hand as they enter the organization. As the business founder, helping the kids develop those essential skills may require a guiding hand, either directly, from within the organization, or a need for additional education.
What is this episode about?
Everyone talks about the parent’s process when it comes to succession planning – but what about the kids who are going to be taking over? This episode showcases the real-life experience of Organic Ocean Seafood Inc., a family-owned business. Founder, Dane Chauvel, appointed Guy Dean as President and mentor to Dane’s 26-year-old son, Paul Chauvel. Guy’s role includes overseeing Paul’s professional development to facilitate a potential (not guaranteed) transition. This episode highlights the often-overlooked fact that succession planning is not a do-it-yourself project. Advice from your accountant, your lawyer and financial planner is critical is assessing the impact and timing of the choices made, and the financial impact on the participants.
What are we hoping will come out of this show?
This episode encourages business owners to draft a business plan, an estate plan, and a succession plan well in advance of the transition to the next generation. The long-range benefits of planning cannot be overstated when it comes to ensuring the continued success of the business after the transition to the next generation. As a financial advisor to business families, I have seen that silence is the great destroyer of family business wealth, so my role includes bringing the business owner’s team of professional experts together to quarterback crucial conversations. Perhaps the next generation has not yet developed necessary skills or professional relationships to address complex questions and issues. Designing plans with the successor involved may seem like a daunting task, but it is an approach that we recommend when protecting the best interests of the enterprise AND the family is the heart of the matter.
Jim Doyle, Doyle & Associates Private Wealth Management, Investors Group Financial Services Inc.
This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Jim Doyle is solely responsible for its content. For more information on this topic or any other financial matter, please contact an IG Wealth Management Consultant. Views of guest speakers may not be shared by IG Wealth.