Succession: 'The Soul of a Family Business'

Feb 22, 2022

Succession: 'The Soul of a Family Business'

succession planning is essential to every business
By Dan Beenken

Last time we talked, we discussed the need to have something to retire to—something new to provide you with meaning and challenges and attempt to match the fulfillment you’ve gotten from being a business owner all these years.

My friend Tom Hubler has devoted his career to business families and has his own company. In his book "The Soul of Family Busines," he spends considerable time discussing some of the ways business owners, founders or outgoing family leaders can work on their next phase. For anyone who falls in those three categories, we can apply something Tom calls the entrepreneur’s checklist. I really like it for a variety of reasons, but two big ones are:

  1. It gives the outgoing generation something to embrace and work on.
  2. They can use it to proactively shape their legacy, along with the legacy of wealth they have accumulated and are going to be leaving behind.

So what is on the checklist, you might wonder? I will highlight just a few:

  1. Create a board of directors for the company (you’ll thank me later)
  2. Create and communicate your estate plan
  3. Do some mentoring with your grandkids—help them with their career planning

I see many founders amass assets and wealth for themselves and their families. They spend their entire lives rolling that snowball as big as they can make it, but at the end of that life they create such family chaos because they don’t instill values or a vision for how their wealth should be used. I see this as a big part of finishing the job right. 

Two simple questions to ask but so complex to answer: 

  1. How do you want the money to be used? 
  2. Just as importantly, how do you NOT want it used?

I could give examples from other clients, but at the end of the day it doesn’t matter how others do it. You’ve earned what you have, thus you’ve earned the right to draw it up as you see best for yourself and your family.

Spend some real time on this. It won’t be as immediately gratifying as putting out fires at work, and you won’t have a lot of instant, tangible proof that you did anything. However, the fruits of this labor will endure far longer than other ways you might spend this time.