Tell Me a Story: Evaluating Where You Are, Where You’re Going

15 May Tell Me a Story: Evaluating Where You Are, Where You’re Going

We all love to tell stories.

Stories help us make sense of the world and our place in it. We tell stories of how our parents met and started their life together. We tell stories of how we chose our course of study or started our first job. Through these stories, we arrange the random acts of our lives to create a meaningful narrative.

When it comes to your business, especially your family business, the story is important too. You may have started your business because you were bored. But it’s more likely that you wanted to support your family and protect them from something “outside” that you didn’t like.

Consider the stories people tell about your business today. Whether it comes from an employee or a customer, these stories are a reflection of your business and the steps you took to grow it to its current state.

The most powerful stories about your family business will describe a key turning point or an opportunity that lead to change. These stories include a variety of transformational moments, including:

• Business changes, such as periods of growth and decline, opening new locations, major sales, or even including non-family members in leadership positions.
• Ownership changes, such as the introduction of external investors, shareholder agreements, dividends and shares belonging to non-family members.
• Family changes, such as major illness, medical conditions, major moves and separation or divorce.

These stories begin to matter even more when it comes to planning a transition for your family business. Depending on who is poised to take over the next phase of the business, the next transition can be a continuation of the old story or an entirely new direction for the business.

If it’s time for you to consider planning for a business transition, begin by evaluating where you are right now. Think carefully but be brutally honest about your situation. If you need help, consider these questions as a starting point:

1. Are you considering retirement? When would you like to retire?
2. Independent of the state of your business, can you afford to retire? Do you have enough saved to support you (and your spouse or partner) through old age and eventual medical challenges?
3. How will your children inherit? Will they all inherit equally? If there is one child who is participating in the business and another who isn’t, will that impact who has a stake in the business?
4. Will the business inheritance affect how your non-business assets are divided? How?
5. Is the child who is involved in the business the right person to take over? Is someone else better suited to this?

These are challenging questions to answer. Like most parents, you love all your children and want the best for them. You want to be fair to them, but you also have a responsibility to protect the business as an independent entity, especially if you have non-family employees that are depending on you.

Consider the steps you have taken along the way that brought you to this point. Remember your business values. Think about the company culture you have cultivated through years of work and growth. Then tell your story again.

To learn more about succession planning for your family business, contact us.

Joel Rose

With over 35 years of experience, Joel Rose helps families – and their businesses – to prepare for the future. He offers guidance and support to help his clients create estate plans and succession plans that meet the needs of the whole family. Through his extensive professional and personal experience, Joel is known for his compassion and his ability to find a creative solution to meet each family’s needs.