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!
For those of you who have successfully passed the baton to the next generation of leadership and have witnessed continued business success, congratulations are certainly in order! You have beaten the odds! Regardless of whether you sold your business to a third party or you successfully passed your business to a family member or key executive, I believe you would agree that succession planning is not a one-time event but rather a continuous journey. It is an ongoing process that requires you to stay engaged and adjust to changing circumstances with regard to your:
- Feelings (Should I keep or sell? When is the right time to sell? How will I spend my time after I sell?)
- Family (How will a sale affect my family/employees? Is my child interested and capable of running the business in the future? Which child should be the CEO?)
- Finances (Do I have enough money to retire? Will the business be able to support multiple family members including me?)
- Federal tax laws - they change like the weather, don’t they?
Can I hear an AMEN? Wrestling with these issues likely resulted in many sleepless nights, but you remained engaged and eventually found answers to some of these puzzling issues. And even after you thought you figured it all out and “had it all done,” new challenges likely arose that you never imagined. Some examples might be: starting a new business, the arrival of grandchildren, new opportunities since the business community knows you are flush with cash after you sold your business, etc. Can I hear another AMEN?
Calling on business owners for the better part of fourteen years, I cannot tell you how many times I have heard the phrase “I have it all done” when I engaged them on the topic of succession planning. I am keenly aware that this is a common objection that is an attempt to end a conversation or to compartmentalize that this is not an important issue. For most business owners, succession planning is about number 99 on the priority list. I get it! Survival, especially in today’s economic times, profitability and continued growth are naturally on the top of the list.
One of the buzz words used frequently today to describe the current economic environment is “fluid.” I submit to you that business succession planning is also fluid, and you must be prepared to revisit your plan on a continual basis. Respectfully, you will never “have it all done”!
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