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Business Succession is Not a Single Event, Planning Starts Now

Barry Cain was quoted in the March 22, 2009, CareerBuilder section of the Chicago Tribune. The quote appeared in Jason Lee’s article on succession planning. In the article, Lee advises family business owners to prepare for the future by following these guidelines:

• Start Planning Early—Succession planning is a gradual process—not a single event.
• Get Outside Help—Hiring the right professionals will help you put the best possible plan in place.
• Be Open to Change—Be willing to let your business adjust to new leadership.
• Be a Coach—Start grooming the future owner(s) years before you retire.

Barry underscores these points with the following remarks:

     “Often, there is a reluctance for business owners to groom the next generation for leadership, whether because it forces them to acknowledge their mortality, an inability to let go of a lifelong labor of love or an unwillingness to designate one successor over another,” says Barry Cain, Managing Director of the Family Business Center at Blackman Kallick, a Chicago business consulting and accounting firm.

     “Waiting too long drastically reduces the probability of a successful transition, limiting essential time and resources to identify the needs and match them with long-term objectives.”

Barry has also recently written a few articles on this topic including “Are You Sure Your Kids Will Want the Family Business?” and “Don’t Pin All Your Hopes on One Family Successor.” Both articles outline the importance of planning, nurturing and using available resources to ensure a smooth transition.

As you prepare for and embark on the transition, consider the following:

• Have you talked to your family and business management team about your succession plans to learn what they want?
• Have you put a plan in place for the nonfamily members of the management team to ensure that actions taken will not drive them away?
• Have you developed an advisory and/or coaching structure for the next generation to ensure that a team of advisors is in place and ready to hit the ground running should succession arrive sooner than planned?

Answering these questions should help you, your family and the rest of your company prevent potential difficulties and therefore smoothly transition your business to the next generation.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.