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If you have watched the TV show Succession, or you have a vague understanding of it, you know that it is a tragedy. It is the story of a family trying to figure out how to move forward as the aging patriarch’s health fails and there is no clear path forward for the family business. If you own and operate a family business, even if you aren’t part of the family, succession planning should be reviewed every year. Things change. Here are some things to consider!
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About Pat McGrew
Pat is a well-known evangelist for inkjet productivity. At McGrew Group, she uses her decades technical and marketing experience to lead the industry toward optimized business processes and production workflows. She has helped companies to define their five-year plans, audited workflow processes, and developed sales team interventions and education programs. Pat is the Co-Author of 8 industry books, editor of A Guide to the Electronic Document Body of Knowledge, and a regular contributor to Inkjet Insight and WhatTheyThink.com.
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Discussion
By Robert Lindgren on Jan 16, 2024
The temptation to keep it in the family is understandable, but the challenge is that the skills and determination that are key to building a business aren't usually inherited.
This reality is compounded by multiole family members who understandably want a share of the pie.
For these reasons, the sale of the business is frequently the best option for all.
By Pat McGrew on Jan 16, 2024
Hi Robert! It can be, but there have been many successful, planned successions. There is often pride in the family name and what the business provides. Often, the family decides to groom the coming generations, sending them to school to get the right skills, sending them to work in other companies for awhile to learn new approaches, and then brings them back in. Not every family member will want to be involved, but for those that do, it can be an amazing journey.
Selling is a one time cash out. Continuing to grow the company is a long term revenue stream. Many of the family companies I've interviewed hold the company in a trust to allow all family members access to some of that long term growth.
In any case, it is always a great idea to get valuations of the business on a regular basis!
By Robert Lindgren on Jan 16, 2024
Long term growth is a great goal and a wonerful win if achieved. Achieving it requires that the successor generations have the same skills, drive and determination that made its foundation possible.
My fifty years of working with family owned printers in Chicago with PII and Los Angeles with PIASC hae taught me that this is possible but difficult. In many cases, cashing out while it's at its peak is the best solution for all.
By Pat McGrew on Jan 16, 2024
Robert. I'm going to see the glass half full. My 50 years has taught me different lessons it seems, but the point of the article was to plan. I don't know if it it's many cases, some cases, a few cases - every business and every family is different. One size doesn't fit all. We have four family businesses. We have this conversation regularly.
By Wayne Lynn on Jan 17, 2024
Pat and Robert, you both make good points. But there is a point you may be missing. I think the long-term ingredients that make the difference is entrepreneurial creativity and drive that keeps re-inventing the business through the changes in markets and technology that inevitably come. Those do seem to run in families but sometimes skips generations. The skips are hard to overcome, and no amount of training or experience seems to change that. I agree that planning is key but if the process indicates that the entrepreneurial magic is no longer there, cash out!
By Pat McGrew on Jan 17, 2024
Wayne! That is an excellent point and I do see the generational skipping quite a bit. There are many paths to getting over the hurdles, but you are so right that if you've lost that loving feeling it's time to move on.
By Robert Lindgren on Jan 17, 2024
I've seen generationa skipping as well. Maybe the key is to concentrate on grandchildren!