|
|
|
Cottage Living And The Grilling Is Easy
(NC)—Whether you spend a week or a weekend at the cottage or cabin this summer, an important part of your holiday fun involves sharing good meals with friends and family.
Summer is the time to kick back, relax and soak up the sun. Although we...
Family Breaks - Some great ideas for winter
Outside of the summer holidays it can be difficult to find quality entertainment for the children when they are off school. When it is cold and wet sticking them out in the garden isn't really an option, which means they are charging around the...
Holiday Survival Guide; Strategies for Surviving Holiday Dinners, Family Events and Other War Zones
No matter how well we may have weathered our basic training, nothing can fully prepare us for the front lines of family gatherings. We're in the thick of it, dodging live ammunition, and fighting the urge to return to our old, reliable patterns ...
Planning a Baby Shower? : These Tips Make It Stress Free
One of the most pleasant parties to plan has to be the baby shower. The mom-to-be gets so much attention and she can just sit back and enjoy all of the fuss. The key to creating this wonderful event is organization. Here's everything you need to...
Puppies, Kittens, Rabbits, Hamsters, Fish Tanks, Exotic Pets and Bird Houses!
Pet's, any kind of pet can be a welcome addition to your family. Children love to play with puppies and kittens. They learn about life as their pets grow and mature. Dog’s and cat’s are wonderful companions to both the young and old of any...
|
|
| |
|
|
|
|
|
|
PASSING THE FAMILY BUSINESS TO THE NEXT GENERATION - IS IT THE BEST CHOICE?
As Penn State professor William Rothwell ominously points out in the forward to Exit Right: A Guided Tour of Succession Planning for Families in Business Together, more than 40% of the people who run the closely held operations that comprise 80% of the North American economy will retire by 2007. It makes me wonder, what is going to happen to all of those businesses? Although it is a noble gesture, passing a business down to the next generation is more often than not, unsuccessful. In fact, statistics show that only one-third of all family businesses are successfully transferred to the next generation and only 13% are transferred onto the third generation.
Many family business consultants say the primary reason for this low survival rate is the failure to develop and effectively plan for the transfer of ownership and management of the closely held family business. I agree that this is a factor, but in my dealing with family businesses I find that there are some more fundamental reasons. The first is that the next generation has a lot different life style than the business founder and entrepreneur. They do not share the same drive and commitment that dad needed to build the business from scratch. They go to the good schools, get a taste of the good life and generally do not share the passion of the business founder. I recently was involved in selling a produce distributor. I found that most of the firms were in their second or third generation. I asked a third generation owner why this particular industry had such success with keeping the business in the family. He said, “When you are up and on the docks at 3 am and work 12 hour days, you don’t have the time to spend the money.”
The next generation may have a grand scheme to turn the traditional printing business into a media empire or a liquor business into an entertainment enterprise. A few years back the second generation of a well known Chicago area computer leasing and IT Services Firm tried to turn it into an Internet Venture Firm with disastrous results.
Before you just assume that your torch will be carried by the next generation, make sure that the next generation even wants to run the business. Imagine the loss in value that would have occurred if the real estate billionaire from the western suburbs had turned his empire over to his son who
simply wanted to produce plays.
Are your heirs even capable of running your business? Have you held on to the reins so tightly that the kids involved in the business have not been able to develop their decision-making or leadership skills? Do they command company respect because of their personal strength and skills or are they grudgingly granted respect because they are the child of the owner? If that is the case, the odds are not good for them taking over when you retire.
Another big challenge is trying to balance fairness in employing many children or even grandchildren in a family business with various skill levels, compensation levels and ownership levels. The jealousy and in fighting can absolutely grind the company’s progress to a halt.
The business owner must make some difficult decisions when he or she decides it is time for them to retire. Why did I create this business? Was it to keep this business in the family for generations or was it to provide for my family for generations? If the desire and the capability of the children are not evident and the company is large enough, it may be the right decision to first get outside board members actively involved as step one. Step two would be to hire professional management to run the business. A second alternative is to sell the company while you are still running it and it can command its highest value. If you have children that want to remain in the business for the immediate future, incorporate that into the sale agreement with employment contracts.
Another way to think of it is, while I am running the business, the best ROI is to keep the bulk of my net worth invested in this company. If I am no longer running the company what is the best risk reward profile for my net worth? Would my heirs be better off if the business was sold and the value converted to financial assets?
About the Author
Dave Kauppi is a Merger and Acquisition Advisor with Mid Market Capital, Inc. MMC is a business broker firm specializing in middle market corporate clients. We provide M&A and divestiture, succession planning, valuations, corporate growth and turnaround services. Dave is a Certified Business Intermediary (CBI), a licensed business broker, and a member of IBBA and the MBBI. Contact (630) 325-0123, davekauppi@midmarkcap.com or www.midmarkcap.com.
|
|
|
|
|
| Family.org |
| Offers practical help for marriage and child-rearing. Recent magazine articles, letters from Dr. James Dobson, news, and RealAudio broadcasts. |
| www.family.org |
|
| FamilyFun: Fun stuff for Kids, Parents - and More Family Fun |
| Family Fun is your online source for arts and crafts, recipes, and parties for every holiday, plus hundreds of ideas for kid crafts, birthday cakes, ... |
| familyfun.go.com |
|
| Family.ca |
| Take polls, rant and rave on Canada's family broadcaster site. Full of shockwave games, animation and information about the shows they carry. |
| www.family.ca |
|
| Family.com - closed beta |
| Features a to do list, calendar, and recommended sites for health, shopping, and recipes. |
| family.go.com |
|
| FamilySearch.org - Family History and Genealogy Records |
| Search for family ancestors. Billions of free family tree, family history, ancestry, genealogy and census records. |
| www.familysearch.org |
|
| Family - Wikipedia, the free encyclopedia |
| A family consists of a domestic group of people (or a number of domestic groups), ... Members of the nuclear family use descriptive kinship terms: ... |
| en.wikipedia.org |
|
| Family (biology) - Wikipedia, the free encyclopedia |
| The concept of rank at that time was still in statu nascendi, and in the preface to the Prodromus Magnol spoke of uniting his families into larger genera, ... |
| en.wikipedia.org |
|
| Family Guy |
| The official Family Guy website with everything you ever wanted to know about the show and more. |
| www.familyguy.com |
|
| Parenting advice, child development and family reference at ... |
| FamilyEducation.com provides parents with educational printables, games, activities, parenting ideas, tips, family advice, and information on learning ... |
| www.familyeducation.com |
|
| Family Life Today |
| FamilyLife, a division of Campus Crusade for Christ, provides practical, biblical tools to strengthen marriage and family relationships, including the ... |
| www.familylife.com |
|
| WorldVillage - A Family Friendly Portal for Families, Kids, Adults ... |
| WorldVillage is for families, kids, adults, parents and teachers. Features include coupon codes, online games, downloads, internet monitoring and internet ... |
| www.worldvillage.com |
|
| Open Directory - Home: Family |
| Family Check-up - Provides assessment activities and access to educational materials related to family health with respect to family life, finances, ... |
| dmoz.org |
|
| Free Family Ecards, Family Greeting Cards, Family Greetings, Cards ... |
| Express your appreciation to your family/ loved ones for all that they have ... Reach out to your friend/ family/ loved one and let them know how much you ... |
| cards.123greetings.com |
|
| kids and family news articles - arizona education - arizona family ... |
| Family News Articles - azcentral.com provides articles and reports on Arizona education and Arizona family events. |
| www.azcentral.com |
|
| Google Directory - Home > Family |
| Many articles dealing with a wide range of topics from single parenting, family life, child development and stress management. ... |
| www.google.com |
|
| Family Research Council: Wednesday, December 6, 2006 |
| Christian organization promoting the traditional family unit and the Judeo-Christian value system upon which it is built. Provides links, commentary, news, ... |
| www.frc.org |
|
| Sesame Workshop - Home Page |
| The non-profit educational organization behind the show and related educational outreach. |
| www.sesameworkshop.org |
|
| National Sex Offender Registry |
| Free national US search for registered sex offenders. Map registered sex offenders to see who lives in your area. |
| www.familywatchdog.us |
|
| FHI Family Health International |
| Provides the highest quality research, education and services in family planning, STDs/HIV and family health to improve the health and well-being of ... |
| www.fhi.org |
|
| National Family Caregivers Association |
| Caregiving advocacy organization with tips and statistics on caregiving in America. |
| www.nfcacares.org |
|
|