(Editor’s note: This article originally appeared on Bizjournals.com, whose parent company, American City Business Journals, is the largest publisher of metropolitan business newsweeklies in the United States, with 43 business publications across the country.)
If you run a family business, it can be tempting to take advantage of having the whole family together for Thanksgiving and hold a business meeting.
It might even be more tempting if some of your children or siblings live hundreds of miles away. You don’t get to see them every day so why not seize the chance to meet face-to-face and make some important decisions about the future of the business?
Not so fast. Before you schedule a business meeting, weigh the benefits versus the liabilities. If you meet regularly by phone or in person, it may indeed make sense to schedule a relatively brief meeting to recap the year and tee up some challenges that you will face in the new business year. But this is not the time to make big decisions or engage in heavy discussions that might cause anxiety or spark heated debate. Wait until after the holidays for that.
The last thing you want is for family members to leave the meeting with hard feelings or concerns over their future and the company’s. You could end up ruining the very holiday that you gathered to celebrate.
Thanksgiving is family time. This meal among family and friends is the very essence of the holiday. So that you and the entire family can savor every minute of it, avoid distractions, no matter how important they might be to the family business.
Now, I’m not naive enough to believe that there will be no discussion of business. After all, the family business and its success are a big reason why you and the family are able to gather and celebrate. But these conversations will occur naturally. And they are a great way to nurture the strong, interpersonal relationships that are part of a family and certainly a family business.
It is through these important one-on-one discussions, away from the day-to-day operations of the business, that you can gain some valuable insights into who might be ready or even interested in taking over the business one day. These conversations can help confirm, or just as importantly, cause you to rethink your assessment of who is the heir apparent.
And they can be a reminder that it might be time to tweak your succession plan, or to create one. This is especially true if you are a Baby Boomer nearing retirement and preparing to participate in the greatest generational transfer of wealth the world has ever seen, an estimated $30 trillion.
The question of who in the next generation is ready to lead the company or can be prepared to lead it is one you must ask yourself over and over.
Depending on your assessment, there are a number of ways to proceed. If no one is interested or ready to succeed you, you could sell the company and agree to stay on and run it for a set number of years. This would put some cash in your pocket and protect your family as well as your retirement.
You might also want to retain a stake in the company. At the end of an agreed upon period, you would have a second opportunity to sell your share of the company, which potentially could be worth a lot more money.
If the children are interested in running the company but need some seasoning, you might look for an investor who knows your industry and can mentor the children. In the best of all worlds, you’d find an investor who shared your perspective on running a successful business and respected the legacy of the company.
If you haven’t thought about how a succession plan could ensure a brighter future for your business, you should learn about your options soon. An experienced Mergers & Acquisitions advisor can help. The M&A marketplace, like the economy, has been strong for more than eight years now. Most people think we may have a couple more years before the next recession. And it can take up to half of that time to actually sell all or part of your business.
I sincerely hope you have considered all of these options and more. If you haven’t, you’ve got some work to do…after Thanksgiving, of course.
About the Author
David J. Mahmood
Founder and Chairman
Phone: (214) 217-7750