Mentors Aid Successor Development
by Craig E. Aronoff, Ph.D., and John L. Ward, Ph.D.
Co-Founders and Principles of the Family Business Consulting Group
Pairing up with a personal mentor for three to five years can be invaluable to a successor.
A mentor’s job, in part, is to help the successor learn to exercise judgment, take risks, accept a philosophical commitment to sharing and relate to people in an empathetic and intuitive way. The mentor also may confer specific business knowledge, particularly if he or she is skilled in areas the successor wants to develop.
A primary qualification of a mentor is a keen regard for the successor’s best interests and a desire to help the successor become even more successful than the mentor. The mentor must be someone who would never feel threatened by even the wildest success on the part of the successor. 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…