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How "Over Giving" to Your Kids Can Impact Future Succession Goals

The eventual transfer of business related assets to children is a common concern shared amongst family business owners. As a result, client meeting discussions often turn towards evaluating the most effective approach. 

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To Create or Not Create a Succession Plan – That is the Question

On a regular basis, I get to talk with other succession planners. One of the topics that comes up frequently is the mindset a lot of business owners have in regards to needing a “triggering event” to prompt succession planning. The unfortunate thing about a triggering event is that it is usually just that, unfortunate. 

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Complications of an In-Law Employee

Succession planning takes a business owner in many directions. Not all families have natural successors, and not all family members are cut out to work in a family business. Furthermore, in many circumstances business owners desire to supplement the finances of unemployed family members. Therefore, I am commonly asked what to do about employing in-laws. My common answer is to tread carefully; hiring an in-law is a big deal and a complex undertaking.  

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Living in Dad's Shadow - When Kin Can Cash In

"I love coming to work every day!” exclaimed the 81- year old dealer. No doubt and he definitely still had plenty of gas left in his tank! Energetic and mentally sharp, his idea of “retirement” was to come in to work at 10:00 a.m. (“but I stay at least until 5:00 p.m.”). As the founder of his dealership empire, he was extremely proud of what he had accomplished and still felt he could contribute and run the business if he had to. So what’s the problem? 

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Family and Business = Harmony or Fireworks?

A dealer recently told me, “I have one brother who is my best friend and one who I don’t talk with, all because of business and financial issues.” Tragic yes, but not uncommon. Having worked with auto dealers and their families for 27 years, I have witnessed situation after situation in which the family business has resulted in lots of family heartache. Fortunately that does not have to be the end result and there are many examples of family dealerships being run successfully by harmonious family members. So what are the landmines that you need to avoid?

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Successor Development: 5 Key Indicators for Evaluating a Successor

If multiple successor candidates are available, it is important for you as the business owner to objectively approach selecting the successor leader. To evaluate the candidates, you can use what I refer to as the 5 C’s, which are five key traits your ultimate successor should have. 

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Is Your Successor Ready to Take Over Today

I saw a cartoon recently in which the owner of a business said to his son as they gazed out of the window on the family business, “Someday Son, this will all be yours, unless I can come up with a better solution!” That statement echoes the sentiment of many dealers I’ve worked with who are worried that their son or daughter is not prepared to be able to lead the company if something happened to Dad today. 

The question that needs to be answered involves the following: Is your successor identified, trained, approved by the manufacturer/s, respected by management and able to run the company successfully today? This may involve your son or daughter, or possibly a key manager. Unfortunately, in most dealer’s situations, the answer would be “no” or “I hope so”, neither of which is a satisfactory answer.

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How Do I Motivate My Children to Choose a Career in the Family Business?

I am commonly asked "How do I motivate my children to choose a career in my business?" Motivation is the ability to influence others to take action. Exterior influence, both positive and negative can generate short-term influence. However, as soon as the source of the influence is no longer present, the motivation begins to dissipate. My belief is that you cannot genuinely motivate someone. Your best hope is to help them internally choose a positive opinion towards your desired actions. 

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How to Deal with the Sensitive Issues of Succession Planning

If you’ve been thinking about succession planning, you already know there’s a lot to consider.  Dealing with estate minimization, tax avoidance, gifting, buy/sell agreements, etc., etc., can give people major headaches.  And then there’s the human element associated with the transition of wealth, family leadership, and business concerns from one generation to the next, where we sometimes trade headache for heartache.  

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Busting a Succession Myth: Talent and Intelligence Are Overrated!

I know.  You thought you were supposed to pick the best and the brightest. Once upon a time so did I.  And then I learned a very important lesson:  The most talented person is not always the best person, and some people really are too smart for their own good.

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Thoughts on Succession Planning and the Business Life Cycle

As a succession planner I am avidly seeking to motivate business owners to take action. Unfortunately, I am not batting 1,000 due to a variety of reasons. Beyond my personality quirks and communication shortcomings, there are many business owners who do not want to become engaged. Irrespective of my attempt to demonstrate how "succession planning builds value" they have limited, if any, interest in addressing the issues that impact the continuation of business success. Timing may be bad or other priorities may be dominating if not consuming excess mental energy. Or perhaps these business owners lack the motivation and experience to spend time and money on something that will not fall strictly into their personal column of benefits. 

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The Importance of Conveying Your Message to the Successor

The immigration debate rages on, as today a federal judge put Arizona’s immigration law on hold, therefore upholding the idea that illegal immigrants, or undocumented workers, depending on your leaning, have rights in the U.S, namely the right to enter our country on their own terms.

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Skip Generation Cross Purchase Agreement

A new client consisting of two 50/50 partners expressed a desire to develop a buy-sell agreement around life insurance policies that they had been sold prior to my engagement. This was an extraordinary business reflected by the unique synergy created by the 50/50 partnership. Each partner had brought unique skills sets to their business that had been affirmed by success beyond anyone’s imagination. The values involved were tens of millions. The planning initiative also involved the updating of estate document and the initiation of strategic gifting.

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The Value of Pre-Marital Agreements

Building a healthy, strong, and long-lasting marriage requires a lot of hard work. Good marriages don’t happen by default, they require intentionality and equality of contribution and effort by both spouses. Unfortunately, even the best of relationships endure many significant challenges. As one marriage psychologist said, “Marriage is really, really, really, really, really hard work for about the first 20 to 25 years…and then, it starts to get kind of good.” This may be an overly negative statement, but it reflects the reality that establishing the foundation of a long-lasting, healthy, and fulfilling marriage is not easy.

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The Difference between a Family Member Employee and a Successor

A client who managed the family business alongside his two siblings recently told me his son was graduating and he wanted to develop a plan for his son to join the business. The client wanted this successor development curriculum so he could give his son the assurance that he was being fast tracked.  He stated it was very important for his son to catch up to his cousins who entered the business six years earlier, otherwise his son may not be considered as a viable successor candidate.  I responded with an explanation that a family business could have the good fortune to have more than one successor. 

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Rediscovery: The Secret to Life Transitions

Regardless of the kinds of activities you follow – sports, music, movies, politics, etc. – you’ve probably wondered why some people hang around for so long, and sometimes too long. Brett Favre may have played one season too many. Frank Sinatra may have sung a few years too many. Why it happens is fairly simple; and how it happens should be a lesson to all of us. 

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Succession Planners, Exit Planners, Family Business Advisors: What’s the difference?

Succession planner, exit planner and family business advisor are terms often used interchangeably providing the assumption that they all share the same meaning. While the exit planner and family business advisor endeavor to address some components of succession planning, there is a clear distinction between their limited scope and the comprehensive mission of a succession planner.  

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Take a Succession Snapshot - Do you Know Where You Stand?

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About The Rawls Group - Business Succession Planners

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The Succession Matrix - What You Need To Know about the Issues Impacting Your Succession Goals

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