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Make Sure What You Have Is What You Need - The Importance of Reviewing Your Planning

You may have heard the saying “the only thing that remains the same is change,” and that is especially true when it comes to planning for the future of your business.  My partners and I are constantly reminding clients that change will be a constant in their succession planning environment especially as it relates to their feelings, finances, family and federal tax laws. As these changes occur, reviewing and updating various aspects of your planning is imperative. While at times this can appear to be inconvenient, it will ensure you maintain proper alignment and ultimately increase the probability your succession plan will succeed.

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How to Align Business with Family Goals

A few weeks ago I met a prospective client who happened to be in business with three of their siblings. Two of the family members are in their mid forties and two are in their mid fifties. They have done a fantastic job of giving birth to and developing a successful business over the past twenty years. However, they have reached a point in their business life where they are struggling with what to do next. After spending approximately two hours with this family, it became clear to me that they have been working in opposite directions. Each family member was doing what they thought was important for the business, not necessarily what is in the long term best interest of the company. Thus, one of my conclusions was, “your vision is in need of an alignment.”

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How to Avoid Your Family Business From Becoming a Sinking Ship

Last night was a great night for watching movies about righting sinking ships.  First, I saw a few minutes of Pirates of the Caribbean.  I tuned in just as Captain Jack Sparrow and the rest of the crew were running back and forth from starboard to port in an effort to right the ship and return to the land of the living. 

Then came the Titanic, the ship that couldn’t be sunk.  Unless, of course, it hit an iceberg in the North Atlantic.  As the band played, passengers on that ship also got caught up in running back and forth.  For most of them, the outcome was tragic.

Sometimes, we see similar things happen with families, especially when one or both parents try to run the family like it’s an extension of the business or run the business like it’s an extension of the family.  In either scenario, there’s lots of running around and rearranging of the deck chairs; and it’s almost always damaging and sometimes fatal to relationships.

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Success - It is a Shared Thing

As a survivor who has passed the foremost trial of succession, it’s a good time to make an assessment of the things you have done right.  There is no future dwelling on the negative. On the bright side, your survival affirms my theory that as a survivor, there is nothing you do wrong that cannot be many fold reconciled by the things you do right. As expressed earlier, success is not always defined in terms of those thin disguises purchased with prior profits. How many examples have you seen of people with mansions, yachts and jets going bankrupt? Success, which comes from the things you are doing right, is a NOW thing. 

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Beating the Odds: Four Building Blocks to Create Change

recent survey of 3,199 business owners and executives indicates that only about 30 percent of programs addressing “change” succeed.  Where 30 percent sounds low, that is considerably higher than the success rate of programs addressing generational changes of business ownership or succession.  If both programs involve managing new behaviors, why is the success rate for one so much higher than the other?

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3 Keys to Inspire Change

There are four building blocks that serve as cornerstones for successful change and, by extension, successful business and family transitions.  These four are:  Inspiration; Stake in the Game; Tools; and, Feedback.

A truly rational person, Star Trek’s Mr. Spock, relies on common sense to convince others to move in a certain direction.  This approach, with all its logical merits, often results in misdirected resources of people, time, money, and unintended consequences for one simple reason.

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How and When to Turn Over or Sell the Reins

Today, let’s talk about how you set the stage for a graceful and timely exit.  Depending upon your disposition of the business – sale, family transfer, outside management - some of the steps listed below may take anywhere from a few years to a couple of decades to implement effectively.  So, the sooner you begin this process, the sooner you will be able to begin climbing other mountains. 

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Are You Falling Victim to the "Can't Leave" Syndrome?

In August of 1972, the celebrated childrens’ author Dr. Seuss addressed the issue of succession planning.  His chief character in the book, “Marvin K. Mooney – Will You Please Go Now!” just couldn’t bring himself to get out of the way and let someone else take center stage.  Almost two years later, in July of 1974, Dr. Seuss changed his main character’s name to Richard M. Nixon and sent his revised book to columnist Art Buchwald.  Buchwald received permission to publish the revised lyrics; and nine days later, on August 8, Richard M. Nixon went.

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Goals: Turn Them Into Reality

We probably all know a lot of people and businesses with bold, audacious goals.  Some of them get accomplished.  Some of them don’t.  What happens to those that don’t?

After years of working with individuals, families, and various types of business organizations, I have come to the conclusion that people who realize their goals have a plan for doing so.  They are not content to be “dreamers”; they focus instead on being “doers”.

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I Have No Qualified Family in the Business - What Are My Succession Options?

In previous posts we touched lightly on the staggering statistics that show nearly 75% of all family businesses will have difficulty with perpetuating business success. Continuing business success into another generation is often dependent upon a variety of key managers, especially if you do not have family in the business or your family is unqualified for ownership. In effect, they become the “Succession Bridge” because a committed group of competent, capable, and committed managers can keep the company moving forward.

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Business and Family Success - Can You Have Both?

One of the mantras around our offices concerns the health of interpersonal relationships in a family owned business.  It’s quite simple, and I really like it.  Are you ready?  Here it is:  No business success is worth a family failure.

Over the years, I’ve come to realize that everyone’s family, my own included, experiences some level of dysfunction.  It can be anywhere from somewhat comical to outright tragic.  Imagine reaching a high level of business and financial success only to learn that your spouse wants a divorce and your children don’t want to be around you. 

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Recipe for Success

Recently I had the privilege of attending a business Hall of Fame induction ceremony in the Midwest for one of my clients and several other business owners and leaders in his community. While each of the inductees had diverse business experiences and backgrounds, they shared several common traits which include: developing and articulating their vision, passion, humility, supportive families, winning attitude, innovative, surrounded themselves with the right people and promoted teamwork. These individuals knew where they wanted to go and were relentless in their pursuit to achieve excellence in their business and also giving back to their community. After hearing each of the individuals speak, it was apparent to me that the common traits listed above could be a recipe for success in your business as well.

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Compensation Plans for Family Member Employees

Most parents contend they love all their children equally, so naturally they want to treat them equally (which I can appreciate as a parent of three boys). However, there is a distinction that should be made regarding an equal estate distribution and equal compensation. Let’s face it, every person is blessed with a unique personality, unique talents and unique skill sets. Furthermore, every individual is motivated by different things. Doesn’t it stand to reason that individuals (including family members) should be compensated based upon what they do rather than who they are? I submit to you they should!

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Think You're Too Young To Begin Succession Planning - What You Should Know That May Change Your Mind

Translation: “I am bullet proof and have no intention of dying prematurely”, “I am not interested in enhancing business productivity, profitability and teamwork”, “The business is all about me” and “I am not interested in protecting the value of my business and the welfare of my family”. Do you realize that when you state you are too young to begin succession planning this is what you are actually saying? Think about it!

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Have You Fallen for One of the Biggest Succession Planning Misconceptions?

How many of you actually believe that you indeed “have it all done” when it comes to your business succession plan? Come on, be truthful. I know there are some of you who believe in your mind’s eye that you have done all you can to successfully transition your business. Many of your predecessors felt the same way you do, but the statistics speak for themselves: approximately 33% of family owned businesses succeed from the first generation to the second and approximately 10% successfully make it from the second generation to the third. The truth is, when it comes to business succession planning, there is no such thing as “having it all done” just like there is no such thing as achieving perfection. There is always something else to do!

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How to Achieve Balance Between the Family and Business

In my last post, "How to Find Balance Between Family and Business," I suggested that there are three things that great and enduring family businesses do:

  1. They are dedicated to creating a balance between family and business priorities.

  2. They proactively encourage and are dedicated to the family’s cohesive, supportive values that promote family and business balance.

  3. They achieve Succession Success.

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How To Find Balance Between Family and Business

“Oh, I’m just so tired of this. I want the business to continue, but I don’t want to be bothered with it anymore.” These words, recently voiced by a client, came out of addressing family dynamics that are impacting business decisions. There are a multitude of reasons to not address family relationship dynamics as they are impacted by the business and, conversely, they impact the business. True family leaders don’t cower in the face of these family challenges because they understand that their greatest asset is their family members. Instead, they boldly engage the family in dialogue and interactions that can at times be emotionally trying and nearly impossible to navigate.

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What is in Succession Planning for Me, Beyond a Distraction and Bills?

What's in Succession Planning for Me?

Some things are more obvious than others. However, occasionally I am asked “why should I do succession planning?” My response is that succession is not a natural progression of an enterprise. You have a right not to care but if you don’t care, your employees, bank, strategic partners, and community who love you are going to resent you.

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Have You Thought Through Your Exit Strategy

In my experience as a succession planner I have encountered several business owners who have expressed a desire to transition their business to either family members or entrepreneurial key managers. Many of them believe they are ready to turn over the reins but all too often they have not considered all of the implications and the vast majority have done very little to facilitate an exit strategy for various reasons.

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How to Assemble Your Succession Planning Team, Who Needs to Have a Place at the Table?

As we begin a client relationship, one of the questions that often comes up concerns what happens to the accountant, banker, lawyer, and insurance advisors that have become friends, neighbors, and trusted advisors over the years. "Do I have to fire them?"

Well, no. Of course not. You should know and believe, however, that your team is giving you the best available advice in their specific areas of responsibility. After all, you and your spouse have put a lot of time, money, and energy into getting where you are. Some people would call that sacrifice. We call it insuring a legacy for generations still to come.

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