Every family’s business is something that we haven’t talked about a great deal in many of my blogs, and I think the time is right now to consider it very seriously, simply because of the age of transition that’s occurring with our baby boomer business owners.
Even if you’re not a baby boomer, even if you’re younger than that and you’re considering succession, it’s very much more around “not stuffing it up” as a headline said that I saw earlier today.
The transfer of wealth over the next 10 years or so is estimated to be around 3.5 trillion dollars. Trillion dollars. So there’s an awful lot at stake here.
I would like you to consider 12 common sense questions that are around protecting your wealth and exiting your family business successfully. These questions have been developed by Thomas Deans, PhD, who has spent a lot of time working with family businesses and has written a best-selling book on the subject.
If you’re a parent and contemplating the gifting of your operating business to a child or to children, you’ve got to find value in hearing about whether the succeeding generation is prepared to risk their capital today to actually purchase the business.
These questions are really good, definitely worthwhile, and I suggest you need to involve not only yourself but also your successor, whether that’s a child or a key employee in the business. If you have no relatives working in the business, just use the “parent” questions for the business owner and the “child” questions for the key employee.
There are no right or wrong answers to any of these questions — the only purpose is to create greater clarity between the generations and how and when the business will be sold or moved on.