What do we Owe Our Children?
Money isn’t the Primary Issue.With a Commitment to one another’s Growth and Happiness, Business Families will Thrive
by Henry D. Lanes
One way of approaching compensation “the elephant in the living room” that too often doesn’t get talked about is to think of parents in a family business as wearing three hats: those of family leaders, business managers and business owners.
What’s the real bottom line for parents who head up a business family? Perhaps a story will help.
A tourist was admiring the beautiful farms of Lancaster County, Pa. Curious about the crops, the man spied an Amish farmer by the side of the road, stopped his car, got out and asked the farmer, “What are you growing here?” More…
Putting “Success” in Your Succession Plan
When you plan the transfer of family business from an older to a younger generation, how the older generation gets the value they deserve out of the business is an important question! The Haft family, owners of the multimillion dollar holding company that owns Crown Books and Trak Auto stores, is currently discussing this issue, among others, very publicly in the courts and newspapers.
There are nearly as many possible solutions to this aspect of succession planning as there are family-owned businesses. This article presents some ideas that can serve as a starting point for your personal planning discussions.
Possibly the simplest answer is just selling the business. You could sell it to family, employees, or some outside party. The major issues in this choice are properly valuing the business, finding a suitable buyer, and how you get paid. One common approach in selling the business is the installment sale, where the older generation receives periodic payments at interest. This can stretch out capital gains, and provide some flexibility to the buyers in meeting the purchase price. More…