Your business is your passion and you take pride in its success. You either built it from the ground up or helped steer it through the ups and downs of the trucking industry.
Many more families depend on you for their livelihood. Unfortunately, less than 20 percent of businesses pass successfully from the first generation to the second and 10 percent or less pass from the second to the third.
If you are one of those distributors whose business has made a successful transition from one generation through the next, congratulations. You know that transition did not take place accidently.
Passing a business from one generation to the next successfully takes planning and communication.
While wills, life insurance policies and trusts are a good start, they are just the tip of the iceberg. Succession planning experts say it is not usually the financial details of the transition that cause the failure but rather the emotional ones.
According to Hugh Roberts, partner/director in The Rawls Group, a firm specializing in family business succession planning, fear keeps many business owners from planning.
Passing a business from one generation to the next successfully takes planning and communication.
The business owner may be afraid of giving up control, or of making a bad decision when choosing which of his children to leave the business to and the ensuing family friction. And, of course, planning to pass on your business means you have to deal with your own mortality.
The industry is filled with a number of stories of successful businesses that ended up closing down following the demise of the owner who had failed to plan for the orderly transition of business.
If you are not currently in the process of planning who will take over your business, I advise you to at least take a few steps in that direction.
Begin thinking about some of the elements that go into a succession plan including business structuring, leadership and management continuity, management synergy and teamwork, personal financial planning, business performance, strategic planning, successor preparation, family governance and family dynamics.
Be less concerned about treating everyone fairly; rather focus on trying to be equitable and to give meaningful assistance to each child.
While you will never take all the emotion out of the process, writing covenants of expectations can help determine roles and responsibilities. This clarifies and defines core operating values, the scope of authority for each person, problem-solving protocols, expectations for keeping each other informed and performance expectations.
Starting the planning process early, detailing expectations in writing and continually communicating throughout the process can help ensure, when the time is right, that your business will successfully pass to the next generation who will keep your legacy alive.
