The pressures and demands of succession and continuation of the family business have always been very real. With the Baby Boomers getting set to retire, these pressures and demands have taken on a new sense of urgency. Unfortunately, too many aging business owners have not comprehended the complexity of the situation nor understood the impact and benefits of proactive planning in increasing the value of the business and their ability to achieve a transfer.
Nearly 2/3 of businesses are family owned. Family businesses are more risk averse, shun expansion, shy away from modern business practices such as marketing and public relations, and do not pursue growth. They are unlikely to network with other businesses and have fewer members in the management team. Very few have a working business plan.
While there are any number of possibilities, most businesses end up adopting one of the following strategies:
· a successful business that will attract the maximum price on sale, or
· a business that will be of value to the future generations of your family.
Both of these strategies require the creation of a healthy, profitable business, which is usually the result of a successful planning process. There are three phases to that process:
1. Identify where you currently stand NOW.
2. Establish WHERE you want to be.
3. Develop strategies and action plans that explain HOW you bridge the gap between where you are now and where you want to be.
Parting thoughts, from an article in the Business Review Weekly: “The family business must change to a ‘business first, not family first’ culture. They have no choice but to change and professionalize, otherwise they will not have a business.”
How prepared is your business?
Get started today!