Everand Logo

Welcome to Everand!

  • Discover millions of ebooks, audiobooks, and so much more with a free trial

    Only $11.99/month after trial. Cancel anytime.

    Succession Planning for Family Businesses: Preparing for the Next Generation
    Succession Planning for Family Businesses: Preparing for the Next Generation
    Succession Planning for Family Businesses: Preparing for the Next Generation
    Ebook173 pages3 hours

    Succession Planning for Family Businesses: Preparing for the Next Generation

    By Michael A. Lobraico and Jonathan Isaacs

    ()

    Read preview

    About this ebook

    Whether big or small, global or local, family businesses are the engine of wealth and security for owners, families, employees, and business as a whole. But as this book shows, that engine can easily break down:
    • If the family, ownership, and business circles related to the business fail to hold regular and candid conversations that clarify ownership's intent for the business and the rules for family members' ownership of and employment in the company
    • And if the business fails to run itself on solid, independent business principles
    Using an entertaining case study of a composite company, Blooms Floral, the authors coach readers in how to conduct these conversations to ensure that future generations of their family business not only survive, but thrive.
    LanguageEnglish
    PublisherBPS Books
    Release dateAug 23, 2011
    ISBN9781926645698
    Succession Planning for Family Businesses: Preparing for the Next Generation
    Author

    Michael A. Lobraico

    Michael A. Lobraico is president of the Family Business Counsel of Canada. A former president of the Canadian Association of Family Enterprises, he is a facilitator, executive coach, and mediator. Jonathan Isaacs is an executive member of the FBCC team. He is a founding member of Sabre Insurance Group. Mitchell Singer is a lawyer with experience and expertise in tax and estate planning and life insurance planning. He is the president of Sabre Life Insurance Group.

    Related to Succession Planning for Family Businesses

    Related ebooks

    Business Communication For You

    View More
    View More

    Related podcast episodes

    Related articles

    • Article

      How To Plan Your succession

      Oct 14, 2022

      How To Plan Your succession
      5 min read

    • Article

      Restructuring: Get Your Employees On Board

      Apr 27, 2020

      Businesses often operate in an extremely challenging environment. Sometimes, external forces can leave management with little choice but to realign, restructure or reorganise the operation to become more competitive, or simply to maintain the company

      2 min read

    • Article

      Effective Succession Planning Leads to Business Longevity

      Apr 27, 2020

      Choosing the right successor can make or break the future of your business. The next-in-line should have long-lasting passion for the work, the company's respect and the expertise needed to maximize profits and promote business longevity. Can your s

      4 min read

    • Article

      4 Retirement Questions to Ask Before 'How Much Should I Save?'

      Feb 17, 2020

      One of the most common questions we get from our clients is, "How much do I need to save to retire?" To answer this question, we recommend focusing first on a few mostly non-financial questions designed to help you picture what "retirement" means to

      3 min read

    • Article

      Cultural Importance

      Oct 21, 2018

      Cultural Importance
      3 min read

    • Article

      The Roots of Entrepreneurial Success

      Jan 1, 2020

      You have been involved in start-ups for many years as a founder, co-founder and Chief Technology Officer. In your experience, does entrepreneurship demand specific traits, or can anyone with a great idea do it? I don’t subscribe to the idea that it t

      6 min read

    • Article

      5 Strategies for Managing Your Changing Risk Tolerance

      Sep 9, 2019

      Saving and investing for short, medium or long-term goals involves a series of trade-offs to design an appropriate asset allocation. Important to creating that asset allocation is understanding your risk tolerance and how it can evolve over time. Ri

      5 min read

    • Article

      Faster Financing for Small Businesses

      Dec 12, 2018

      FOR SMALL BUSINESSES, it can be hard to secure a traditional loan unless you check a whole lot of boxes. But without working capital, how can you grow? Lendr was founded in 2011 to address this familiar challenge. It helps businesses obtain business

      2 min read

    • Article

      Take Back Control

      May 22, 2018

      Take Back Control
      11 min read

    • Article

      Common Business Questions

      Oct 21, 2019

      DAVID HARLAND is the managing director of FINH and works exclusively with multigenerational family businesses. He holds both national and international accreditation in the field of family advising and family wealth. Operating a family business has

      3 min read

    • Article

      Family Fortunes:

      Sep 19, 2019

      Family Fortunes:
      3 min read

    • Article

      One Of The Toughest Questions For Wealthy People To Answer

      Mar 13, 2018

      "Dad -- are we wealthy?" That's the exact question a seventh-grader recently asked of a client of mine. In the moment, poor Dad didn't know how to respond. When we later chatted about the situation, our dialogue went something like this: Me: Tell

      4 min read

    • Article

      Succession Planning And Your Property Portfolio

      Nov 29, 2023

      In New Zealand, where our economy is dominated by farming, succession planning for the family farm is a big issue and one that is never straight forward to plan or navigate, especially for large families. Farms are right at the top of the list of leg

      3 min read

    • Article

      The Hidden Struggle for Men Who Marry into Money

      Jun 12, 2019

      As outsiders looking in, people tend to focus on the many benefits afforded by great wealth. However, substantial wealth can introduce significant complexity within families, particularly among husbands and wives. Much of the discussion around famil

      3 min read

    • Article

      What ‘Non-Financial Assets’ Should Be Included in Your Estate Plan?

      Apr 27, 2021

      Most estate planning attorneys do a fantastic job helping their clients set up the proper legal structures to transfer financial assets, but they often don’t consider the intangibles. That’s where legacy planning comes in. Legacy planning goes beyond

      4 min read

    • Article

      Succession Planning: Delay It At Your Peril

      Mar 2, 2020

      I have often thanked my lucky stars that I wasn’t born into a family business. Yes, I might have been worth much more money, but for every success I’ve seen, I’ve come across more failures. Running any business is tough enough, but when you have fami

      2 min read

    • Article

      The Real Secret To Building A Great Family Business

      Jan 8, 2021

      Why do some families succeed so spectacularly at building and running a business, while others work their fingers to the bone and never really make it? There are numerous reasons for this. Some are in the right place at the right time and find, or st

      2 min read

    • Article

      Estate Planning: 3 Tips to Get Your Family Talking More Effectively

      Oct 23, 2018

      Picture this. You've decided to tell your kids about your estate plan. This is a big step for you and your family. You want to be more transparent, you want to share more information, and you want the kids to be thrilled that they are being brought i

      3 min read

    • Article

      Death Is Unpredictable, So We Need To Prepare Our Successors

      Sep 29, 2023

      A dear friend and business partner recently lost his vibrant and highly efficient wife. With no signs of ill health beforehand, she suffered traumatic heart failure and was gone in an instant. It was a hammer blow, but a month later and still grievin

      3 min read

    • Article

      To Successfully Pass Down Your Wealth, First Share Your Intent

      Aug 22, 2019

      Three children -- one is business-minded, one is a teacher and one is an artist -- grow up in a wealthy household. While they understand their fortunate circumstances, they don't understand just how much wealth their parents had accumulated. The pare

      3 min read

    Related categories

    Reviews for Succession Planning for Family Businesses

    0 ratings

    0 ratings0 reviews

    What did you think?

    Tap to rate

    Review must be at least 10 words

      Book preview

      Succession Planning for Family Businesses - Michael A. Lobraico

      SUCCESSION PLANNING

      FOR FAMILY BUSINESSES

      A SUCCESSION PARADIGM™ BOOK

      SUCCESSION PLANNING

      FOR FAMILY BUSINESSES

      Preparing for the

      Next Generation

      MICHAEL A. LOBRAICO

      JONATHAN ISAACS

      MITCHELL SINGER

      Foreword by Thomas William Deans, Ph.D.

      Copyright © 2011 by The Family Business Counsel of Canada

      All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system now known or to be invented, without permission in writing from the publisher, except by a reviewer who wishes to quote brief passages in connection with a review written for inclusion in a newspaper, magazine, or broadcast.

      Published in 2011 by

      BPS Books

      bpsbooks.com

      Toronto and New York

      A division of Bastian Publishing Services Ltd.

      ISBN 978-1-926645-53-7

      Cataloguing in Publication Data available from Library and Archives Canada

      DISCLAIMER

      The information contained herein is intended for information purposes only and is not intended to be a substitute for specific legal, accounting, tax, financial, or other advice or recommendations for any individual or business. The information may not be the most current or complete. Readers are advised to seek appropriate advice in the appropriate jurisdiction to which it may apply.

      THE SUCCESSION PARADIGM™

      The Succession Paradigm is a trademark of The Family Business Counsel of Canada.

      This book is an overview of the topic of succession planning for family businesses but is not a fait accompli solution in and of itself. Our resource and approach, The Succession Paradigm, is an integrated approach for family businesses and businesses needing to implement a structured process bringing them from the stage of fact finding to transition. This book will ideally be read and applied in conjunction with The Succession Paradigm program and the advice of The Family Business Counsel of Canada, 590 Alden Road, Unit 206-7, Markham, ON L3R 8N2 (905-305-9900); www.familybcc.com

      CONTENTS

      Foreword

      Preface

      Acknowledgments

      Introduction

      Part 1 / WHY YOU NEED A CORPORATE WILL

      1 / Family Businesses: A Cautionary Tale

      2 / How Succession Planning Works: An Overview

      Part 2 / THE SUCCESSION PARADIGM PROCESS:

      THE BLOOMS FLORAL STORY

      3 / The Three Circles of a Family Business

      4 / Phase 1 / Introduction

      5 / Phase 2 / Assessment

      6 / Phase 3 / Alignment

      7 / Phase 4 / Implementation

      8 / Phase 5 / Maintenance

      Appendix 1 / Legal Documents

      Appendix 2 / Shareholder Agreements

      Further Resources

      Index

      About The Family Business Counsel of Canada

      Family Business Counsel of Canada Presentations

      To Order This Book and Access Other Resources

      FOREWORD

      You couldn't invent a more complex and fascinating subject to study than family businesses — they are the perfect intersection of money, family, control, love, trust, and respect. A family business, especially at its inception, represents all that is good about family. These enterprises are loaded with goodwill and optimism, but most of all they are brimming with the hope that hard work, in combination with family members working shoulder to shoulder, will create something magnificent and enduring.

      What unfolds as time marches on in a family business often leaves so many feeling lesser and failed. It is precisely this potential for wealth destruction and family acrimony that Michael Lobraico, Jonathan Isaacs, and Mitchell Singer seek to help business owners avoid through their important contribution to the family business literature. That Succession Planning for Family Business is a collaborative effort by three authors with vastly different types of family business experience and areas of technical savvy speaks to both the complexity of the subject matter of this book and the value of its message.

      As an unprecedented number of family business owners approach retirement, they are being confronted with the stark reality that their last deal — the transition of their business to a new owner — will be their most difficult deal of all. Many business owners will do what these seasoned family business experts have seen over and over — nothing. Doing nothing becomes the default plan for legions of family business owners. Why so many otherwise intelligent and hard-working entrepreneurs fail to plan for the most obvious progressions of life — incapacitation and death — is doubly tragic when you consider how difficult it will be for the surviving spouse and children to operate the business when the business owner is no longer there.

      I have to say that I couldn’t stop turning the pages when I read the draft manuscript, especially the section in which Michael Lobraico chronicles his own family business narrative. It takes extraordinary courage for any author to share personal anecdotes, but it is especially moving when the motivation is to help other families avoid the heartache that the author has himself endured. It is the honesty of this author’s family business odyssey that gives readers a gift — an insight into how high the stakes can be when families fail to initiate and maintain open communication.

      Too often family businesses paint a picture of multi-generational bliss even after family businesses have failed. That this book has been written in such a deliberate and honest voice speaks volumes about the character of the authors, who clearly desire to help families find their own way forward. Readers will see up close and personal that when family business succession is neglected, families will pay so profound a price that it transcends money and cuts right to the heart of why we work. Between the pages of this well-crafted book we learn that the central tenet of a thoughtful succession plan is a family that is built to last.

      The authors have organized this book in a wise sequence. In Part 1, Why You Need a Corporate Will, they tell a cautionary tale — the aforementioned Lobraico family business story. It is undeniably powerful. This sets the stage for a general overview of how succession planning works. The pragmatic nature of this assessment will leave readers thinking and believing that they, too, can master their family business universe — and that asking for help is the first step.

      In Part 2 the authors transition the discussion into an engaging overview of how succession planning is carried out. The authors acknowledge the perception of business owners that succession planning is both complex and time consuming and offer a compelling case that in fact it doesn’t need to be either. They rightly beat the drum for the idea that constant communication among all family members, including those outside the business, is essential. Silence is the great destroyer of wealth. It is the intent of this book to get families talking.

      This part of the book offers another family business story — the hypothetical Blooms Floral story — and ties fascinating family business lessons and themes to the three-circle family business model. Readers will easily grasp how interconnected yet distinct management, ownership, and family are and how an understanding of their interplay is essential for families to successfully manage and transition their business.

      It is noteworthy that every year billionaires die and leave their estate, their business, and their family in chaos. Readers who assume that the success in succession can be purchased are missing the point. Succession planning should be a collaborative exercise that brings family together to share individual and collective ideas about the future. In this new and important book, families in business together have an invaluable new resource to help them gather the courage and confidence to preserve their greatest and most enduring legacy — their family.

      Tom Deans, Ph.D., author of

      Every Family’s Business: 12 Common Sense

      Questions to Protect Your Wealth

      PREFACE

      How can a family business ensure that both the family and the business are protected from one generation to another? How can it ensure that the resources of the family — not just financial but also emotional and relational resources — are enhanced, not squandered?

      These are serious questions, ones we are pleased to address in the pages of this book, based on our:

      » In-depth research into why so few family businesses survive beyond the second generation

      » In-depth experience in helping family businesses plan and implement succession policies and procedures, through the Family Business Counsel of Canada (FBCC)

      We have seen from our work that most family businesses lack the ability, strategic resources, and time necessary to put a successful succession plan into place on their own, and, more specifically, to communicate, implement, and maintain that plan. The Family Business Counsel of Canada helps family businesses deal with just such questions. We collaborate with professionals — including bankers, insurers, lawyers, and accountants — on an as needed basis to deal with specific issues faced by the family businesses that seek our help. And we monitor the progress of those businesses, assisting them in adapting their plan as conditions change.

      Note that throughout this book we refer to The Succession Paradigm™.* This is the Family Business Counsel of Canada’s proprietary and highly logical and effective succession planning process for family businesses. While the book you have in your hand is an overview of this succession planning approach, The Succession Paradigm itself is the on-the-ground process used to help companies navigate through the often complex and bewildering details of succession planning.

      Succession planning is designed for those who want to create a legacy for future generations, whether that means operating the business and its proceeds more effectively or selling the business. The benefits of succession planning should be readily apparent. For example, a family business can substantially increase its value by saving on taxes through proper structuring. Furthermore, the family and family business can reduce legal costs because their lawyers have the benefit of advice from professional experts in the field.

      Please allow us a few words of introduction about ourselves.

      » Michael A. Lobraico, president of the Family Business Counsel of Canada, is the force behind this book. As he relates in his story in the first chapter of this book, he experienced, as part of his family’s transportation business, the painful strains to relationships that are inevitable when communication is poor within and between the three circles of a family business: the family, ownership, and business. He has turned this experience into a passion to help family businesses understand the importance of succession planning and communication. As part of his personal and professional mission, he has been active in the Canadian Association of Family Enterprises, including as its national president. He is a trained facilitator, executive coach, and mediator.

      » Jonathan Isaacs has spent nearly

      Enjoying the preview?
      Page 1 of 1