Blog Having Business Succession Conversations With Your FamilyDecember 09, 2019
Having clear communication with your family is an essential part of business succession planning. As you work through this process, it’s important to know it’s possible to have these conversations in a way that results in everyone still coming to the table for Christmas dinner.
If you have children who will one day take over your business, open communication will move the succession process along. This will help them understand your expectations of them and your vision of their future role in the business. Additionally, it allows you to tweak your plan based on their feedback.
Take the example of parents who want to transition ownership of the family business to their two children. When creating their plan for the transition of ownership, they must also consider the transition of management. But what if neither of their children are suitable to manage? Or one child feels he or she is a better manager than the other?
What if the children don’t get along? Or if one feels the other is not pulling his or her weight? Serious problems in the business can arise if these questions and concerns go unchecked.
If you’ve always had open and honest communication with each other, this process won’t be as hard. However, if your family struggles with communication, or hasn’t created an open environment for those conversations, then consider having a third party facilitate these discussions.
The third party should be neutral, understand what the family is trying to accomplish and be able to facilitate an effective group meeting. They must have listening skills, be non-judgmental and have the respect of all the family members.
Prior to a group meeting, we recommend each family member have a one-on-one meeting with the facilitator. This creates a safe, private environment where everyone can air their grievances without judgement or conflict. We have found family members will often bring up issues in a one-on-one meeting that they would never bring up otherwise. This free flow of communication then sets the stage for an effective family meeting.
In the family meeting, the facilitator should encourage open communication among the group. Knowing all the family issues, the facilitator is in the best position to navigate the conversation, ask good questions, get clarity and offer recommendations based upon that clarity. If done successfully, everyone will feel heard, respected and open to creating a workable plan for the business, even if this means going a different direction than what was originally planned.
Open and honest communication means putting everything on the table, even if it isn’t pleasant or positive. When it happens in a healthy and structured manner, a great plan can be born – one that will see your business and family succeed well into the future. This type of a legacy will ensure your family continues to come together for Christmas dinners for years to come.
If you are starting to think about having a succession conversation with your family, the advisors at Three60 Wealth & Estate Solutions can help. The team of Calgary-based wealth and estate planners can integrate its vast experience and network to create a customized plan for you, your family and your business.
For a truly different financial planning experience, contact our office online or at 403-640-4414 to schedule an introduction meeting.
Authored by: Jason Nagel, Director of Advanced Planning at Three60 Wealth & Estate Solutions Inc.