Following Through with Your
Succession Plan

The importance of following through with the succession process cannot be overemphasized. Great plans for perpetuating family businesses commonly never leave the launch pad for various reasons. The most common reason for not following through with transfer plans is fear, most commonly referred to as "cold feet." Questions such as:

"Am I ready to turn over the management of my business to my children?"

"Can I trust them to be good stewards of our business?"

"Who will be the leader?"

"What will I do with myself if I am not running the business?"

"Am I going to have enough money to retire?"

These are real issues that can cause cold feet and increase the desire to put off advisors who are working to continue the succession planning process. If these questions are not addressed, the succession process will ultimately come to a grinding halt.

Disagreement can also play havoc with the succession process. Parents and/or their children may not agree on facets of the succession structuring. If the disagreeing parties stand firm, rather than compromise, they can sidetrack and even cause abandonment of the succession process altogether.

When disagreement brings the process to a halt, I typically hear, "I wish we had never started this, we were better off doing nothing rather than tearing our family apart." Addressing succession issues is difficult. However, not addressing these issues is unacceptable. If the succession process stops, there is one profound result: everybody suffers. Parents, children, employees and the community at large are the losers when the productivity and security of a family owned business is lost to the trials of succession.

Do not be embarrassed or discouraged by your fears that what you are planning to do may destroy the business or make you financially dependent upon your children. Your concern is legitimate, and likely as not, justified. If you are concerned about what is being recommended by your advisors, or even about what planning you have already done, back up to a place where you are comfortable. Allow yourself to take more time to make these challenging decisions before taking action. Let your advisors know your feelings and let them work on the answers that you cannot find, rather than keeping your concerns to yourself by avoiding discussions and meetings. But keep your mitt on, stay on the field and keep the succession process moving. If you do not say anything, you will ultimately become the problem. If you share your feelings, you will identify the problems and in time, solve it. Continue the dialogues. Continue the succession process. Back up. Call for a "think about it" period. Just stay in the process. The answer may not jump in your lap, but in due time your diligence will give you peace of mind regarding your succession questions. My definition of a successful planning meeting is if the next meeting is scheduled. If you keep scheduling your next meeting, you will eventually work out your concerns.

Doubts regarding your financial future are natural and need to be addressed in a supportive and trusting atmosphere in order to provide everyone peace of mind during this long term project. The succession process should establish an atmosphere through which confidence in decisions can be sustained and strengthened through periodic review and execution. This methodical review will reinforce trust in past decisions as being good ones, and help all involved to feel better about what will take place in the future

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RVN