The Burden of Legacy

“the night before closing the deal. My brother and I sat in a car in the parking lot outside the office building and reflected about whether we failed in carrying on the legacy”

Many family businesses are caught in the dilemma of whether to pass along the business to the next generation or sell the business. The senior generation needs to plan for retirement and feel confident that the younger generation can run the business, and the younger generation has to decide whether they want to stay involved or move on to a different career . Unfortunately, most of the time the family legacy affects the decision.  This legacy can become a burden and lead to a demise of the business if the succession plan includes a younger generation who is continuing on for the sake of the legacy of the founders rather than following their true ambitions.

In our family business, our parents removed the legacy issue as an issue, by More…

Going Outside – The Runaway Manager

“Before we knew it, we learned that we were having a Grand Opening for our new Manhattan retail store later that week. And we weren’t even a retailer“

To help with the growth our family business, our family hired a key non-family manager for the first time.  Attracting an outside manager into a family business is especially challenging with regards to compensation.  Like many closely-held firms, we weren’t willing to give up equity in the business, so we created a compensation package built around a performance bonus.  We selected an outside executive who came from a larger company, who brought proven expertise to grow our company rapidly. Coupled with their high ambition, it seemed like a good idea to tie their compensation into sales growth. More…