Probate/Trust A Timely Business Transition or Transfer

the-carina-nebula-shown-below-contains-eta-carinae-a-massive-star-around-100-times-the-size-of-the-sunMy close call came when a dying entrepreneur wanted to transition his business to his drug using oldest son. His heart was in the right place, but the business decision would have been fatal to the company.

The key employees quickly stepped forward to tell the owner that it would be the end of their employment if this happened.

The son’s behaviors had been onerous – there was no other way to keep the business in the family. It sold quickly, to the benefit of all involved (especially the oldest son).

When a family business suffers the loss of its key entrepreneur, change will happen quickly. If succession planning was done wisely and well the transition can go smoothly and risk is greatly reduced.

Too often, death or disability of the owner is unplanned and human nature and the harsh reality of commerce throw a business into chaos as family members disagree over the critical decisions that must be made for the company to survive.

Success lies in guiding your family business clients to see the importance of timeliness and best practices. Even the best businesses can’t avoid the injury of severe management dysfunction as siblings battle over management and money. Failure is hard to avoid when emotions and disagreement steer a business in the wrong direction.

We counsel our clients to work with a professional family business consultant (yes, they do exist) and recommend a book that advises wise business transition, by Cary Tutelman;

The Balance Point: New ways business owners can use boards (Famille Press, 2008). http://www.famillepress.com/

For those businesses that need to be sold, we recommend time specific marketing, which is an industry specific approach to transferring a business at a fair price in a rapid manner (we offer as part of our profiling and research service).

Timing is important to a business that has lost the glue of its entrepreneur. Having someone on hand to guide the business into the next generation or transfer will greatly lower the risk of failure.

Comment here with your stories of how business transition/transfer have been executed well or poorly.

Your experiences can help others from learning the hard way.

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3 thoughts on “Probate/Trust A Timely Business Transition or Transfer

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  1. I am from a 3rd generation family business. My father and uncle sold the business 10 years ago while in their early 70’s, allowing the 3rd generation to find new directions. This has been tremendous for all the family. I have bought into the wine industry, while other family members have diversified into property. I recommend anyone interested in succession in family businesses consider joining Family Business Australia, http://www.fambiz.org.au.

  2. Hi this post is very interesting. It is true because sometimes it is not always the best decision to pass on the business to family members especially if they are not enthusastic over the company and they do not have its best interest. It is weird because a similar situation happend in my family too, as once my grandad died my father went to ITC Legal Services to go through the probate service to claim his property and possessions which included his business. As he was not interested in carrying the family name on in it he sold it off making that business now successful and my father happy as he has now retired!

    n my grandads company and it has been sold off.

  3. Hi this post is very interesting. It is true because sometimes it is not always the best decision to pass on the business to family members especially if they are not enthusastic over the company and they do not have its best interest. It is weird because a similar situation happend in my family too, as once my grandad died my father went to ITC Legal Services to go through the probate service to claim his property and possessions which included his business. As he was not interested in carrying the family name on in it he sold it off making that business now successful and my father happy as he has now retired!

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