Dr. Dan Nathanson
Anderson Graduate School of Business UCLA
How should a family go about getting information on business succession?
|I suggest that for many many family businesses they go and start to do some reading about family business and cases about family businesses and what works well and what doesn't work well. And when it's time for the next generation to leave, you know the CEO of the company, the Founder of the company; various levels of issues that come up; how can I leave my baby? I still need to be in control to make the decisions or else they run away completely. It's just like buying a business and such, a healthy transition is often very difficult and hard to make happen. I suggest you read and go and get a consultant, family business consultants have sprouted up and talk to a few of them see who you feel comfortable with and work with them through a transition process. There are always issues in a family business, fairness issues. What happens?-and it gets into the estate planning. Well one child wants to work in the business; one child doesn't want to work in the business. How do you split the estate? Does the child that's not in the business get a piece of the business? Do they get voting rights in the business? Do they get compensation from the business? How does that whole thing work in terms of fairness if you're going into the business or not? There's a million questions like that that come up and there's tried and true methods depending on the nature of the specific family and that can vary all over the place. So I suggest that you talk to people, be open about it and look at the best ways to work though a family business situation.|