Less than 3% of family businesses make it to the third generation. That arresting factoid prefaces Every Family’s Business, a book dealing with succession planning for family businesses. In this book review by Canadian Business expert, Larry MacDonald, he reveals how the author, William Deans, draws on a wealth of personal experience: he is a fourth-generation businessman and ran his father’s 250-employee chemical business for ten years prior to its sale. MacDonald says:
This remarkable book is written in the dialogue style of David Chilton’s The Wealthy Barber. It was first released in 2008 and has sold over 100,000 copies so far. Deans himself is much in demand and has done over 300 presentations around the world. He operates out of Hockley, Ontario and has a website at www.everyfamiliesbusiness.com.
When it comes to succession issues surrounding family businesses, most books and advisors deal with how to transfer control to younger family members. But Deans thinks the focus should instead be on selling the business at fair value whether it is to family or non-family.
I would add in here that you can sell to private equity either fully or staggered over five to twenty years.
This sale will all chips off the table and not only assures a more secure retirement for the owner but often leaves behind greater wealth to distribute to heirs. MacDonald says:Many business owners want to hand over their beloved enterprise on easy terms to children as an act of love or because they wish to leave their business behind as a legacy. But for a variety of reasons, as discussed in Every Family’s Business, the transfer often leads to acrimony and dysfunction within the family. It can also culminate in insolvency or a sale at a low price to a non-family buyer.
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