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The first phase of intervention process we normally recommend would include an OPERATIONAL ASSESSMENT of business.
What opportunities are available in terms of profit optimization, cost containment or cost reduction? What are operating parameters of business and what changes in operational procedures or operational protocol might increase ROI of business? What options are available for improving health of business, both internally as well as in marketplace? This OPERATIONAL ASSESSMENT provides family business facts and objectivity that are often obscured by owner /managers being too close to problems.
The second phase would include involvement of a family business ocnsultant who is skilled in both business and family dynamics. These professionals are focused on opening up and developing all possible channels of communication. These professionals should be able to facilitate a strategic plan for business and a strategic plan for family as well.
Addressing one system and ignoring others is wrought with problems that can cause a family business to self-destruct - especially when dealing with generational issues.
The third phase of multi discipline approach focuses primarily on tax consequences of succession. Without proper planning, succession (planned or unplanned) can become a financial catastrophe for both business as well as for family.
More often than not, some financial planning has taken place. Unfortunately, most of these efforts are focused only on one individual - owner/ entrepreneur. As a result, planning generally is incomplete or only sequential solutions are engaged.
The financial planning for succession should be approached from perspective of minimizing total tax consequences of succession. This concept allows for development of a connected and well integrated approach, an approach that considers goals and objectives of family as well as future needs of business.
The "on-going" processes for maintaining a healthy family business would include strategies such as conducting annual or semi-annual FAMILY MEETINGS and establishing an outside BOARD OF ADVISORS.
It should be noted that one of major benefits of this multi-disciplined team approach is ability to involve "outside" professional intervention to family business in a purposeful yet expedient manner. Although segments of process have been cited to help illuminate process, multi-disciplined team approach allows for each segment to be addressed simultaneously.
If this approach makes sense, give us a call so we can discuss particulars of your situation and help you to formulate a plan of action and a timetable for beginning succession planning process. The most difficult hurdle to overcome is procrastination hoping problems will go away or will solve themselves. As Tom Watson, former head of IBM, reflected, lying dead in water and doing nothing is comfortable because it is without risk, but it is an absolutely fatal way to manage a business".
Don Schwerzler and David Jones are Partners in the Family Business Institute - a special resource for family-owned and closely held businesses (http://www.familybusinessexperts.com).