Family Business Succession — A View To The Future
The Twelve Dangers In Family Business Succession — 7. Empty Treasure Chest.
The traveller has failed to plan and prepare early enough and has not built sufficient financial resources to support the growing family and business.
The most common barrier to effective succession is a lack of financial resources for the exiting generation, the continuing business and the new generation — sometimes one of these and regretfully sometimes all of these.
When looking to the future and how your business and family might work together, you need to consider breadth and depth of the family and opportunities you can create.
A growing family requires growing financial resources. If your succession plan involves
a transition of the business along family lines then you will need to grow the financial capacity of the business to meet the needs of not only your family but also your children’s families. If you have three adult children who are all involved in the business then potentially the business needs to be able to feed four families. And if you want to step back and take some capital out then the business must either have that surplus capital or be able to raise it or you will potentially be loading the business up with debt.
As you look to the future, you must be looking for opportunities to expand and grow your business to provide for the increasing breadth and depth of your family.
Succession planning requires a long view to future family needs so as to allow adequate planning and the resourcing up of the business. Otherwise, it may not be able to meet those growing needs and the family will be left with an empty chest.
Here is a brief video clip that speaks into this theme with links to the full video and resources:
