Our Guest Blogger is Tom Deans, author of Every Family's Business:
So if gifting is out selling is in.
But with more sellers than buyers the inclination of throngs of aging business owners will be to wait out this down cyle and sell the business later when they are really ready to retire --you know when they are in their 80's and junior is hitting his prime in his 60's.
Truth be known little in the way of succession planning has ever been done to transfer businesses intelligently.
The script usually unfolds with the business owner dying and the stock rolling to the surviving spouse. It's like a bad movie-- it's Friday the 13th but with more family drama and bloodletting --especially when you roll in some sibling rivalry, add a dash of liquidity crisis family business style when the taxman comes knocking to collect capital gains or estate taxes.To all the founders reading this --here's my message. Offer to sell your business to your kids. If they don't want to buy it, put in place a compensation package for them to help you sell it to someone else. I know that selling the family business can feel like selling family but nothing could be further than the truth when a founder aligns the economic interest of all family members. I have a sneaky feeling that when parents put in place these compensation plans for their children, the love of pursuing the longevity of their family firm will fizzle and fizzle fast (the bigger the comp package the faster the fizzle).
Tom Deans, Author, Every Family's Business: 12 Common Sense Questions to Protect Your Wealth. www.ProtectingFamilyBusinessWealth.com
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