Unfortunately some family members abruptly have to take the reins of a family business due to an unforeseen illness or loss of the business’ leader.
While there are a large number of family businesses that will be transferred over the next few years in an orderly fashion, those that have not taken the time to plan for a transition are likely to get less value for the family’s prized asset.
When a business leader is removed abruptly, family members and key employees must step in to run the business. That change can be very difficult for the customers, suppliers and employees. Some of these stakeholders will pursue alternatives leaving the business with lower sales, harsher purchase terms and possibly fewer employee skills. All of this can be minimized if the owner plans for a transition. Whether the business flows to family, a key employee or an outside party, planning provides constituents with comfort.
“This is my business and I run it the way I see best.” It is your business and in this country you have the right to legally conduct your affairs as you wish. But other stakeholders may bolt if you are so critical to the business that they are not comfortable the business can be perpetuated without you.
If the bulk of your family wealth is invested in your business, your heirs may not have the intended financial resources if your business shrinks significantly or must be sold without the presumption of its ability to grow and succeed.
B2B CFO® has a program to help business owners with the exit planning process. We work with the owner to maximize the value of their business. Visit B2BCFO.com to find a qualified CFO in your area who will partner with you.