All About Family Business Succession

Less than 30 percent of Family Business Succession in the world are the second generation, half that of other companies. How to manage a successful succession? The analysis should be done in three distinct areas: family, business and property. Although at the beginning of the three family businesses are mixed, will eventually evolve independent problems, each in its own way, and involve separate decisions.

First, Family Business Succession is part of the same family development, relationships between parents and children and future generations. Families can use two main tools: strategic planning for the family and the family protocol. The first step is to develop institutions that separate the three areas, starting a family council chose to devote itself exclusively family problems, and will serve as spokesman for the family to the company (which should have a council or board operating) .

This advice led the development of the rules on the relationship between family and business ('protocol'), a long process that must engage all members of this. Second, the business operates and evolves regardless of the family, typically from one business or branch of activity into related companies as suppliers or distributors, and so develops a string of related companies, then enters the diversification of very different business.

The typical development offers opportunities for new generations to be responsible for integrating new businesses, more and more independence. Likewise, in a centralized one-person company is required to establish policies passed and decentralized processes, to make room for specialists and non-family managers, a board capable of handling the complexity of the new business with well-documented strategic business plans .

Third, changes in ownership of the company presents challenges and opportunities for the Family Business Succession. Ivan Lansberg, indicates that the first thing is to differentiate between ownership and management. The second is to professionalize the relationship with the family shareholders who have rights like everyone else. Third, choose well to new outside shareholders, who have an affinity with the company and know the financial policies of the same. Finally, training on managing family wealth for shareholders.

Family Business Succession involves several issues at once: the process and values that make business continuity a core value of family, leadership and healthy development within the family and the organization, the long-term plan term (strategy), the decision that successive generations will take command with authority and make changes in course, the opening to help outsiders as managers or new partners.

Family Business Succession is not a distant problem for when the founders are old, nor is it a problem that can be solved in the short term requires foresight, starting when no problems. The dream of the founders is that your company will endure, as pride and family support.

The Family Business Succession worst happens before a notary, when the founder dies unexpectedly and his will is read. Family Business Succession is a leadership problem in two complementary dimensions: the he wants to do and that leaves them in a loving relationship and respect between parents and children ('child rearing rich but middle-class mentality') .

It is necessary to prepare years in advance, and have sufficient awareness and wisdom to solve it at the same time, the continuity of the company and the family legacy.

The study of Family Business Succession requires a thorough analysis, the size of these may be small, medium or large, and in turn be professionalized or not. This multitude of variants generated the need to make distinctions in their study.

In Argentina, representing about 75% of firms (between 1,000,000 and 1,200,000), generate between 40% and 42% of GDP, contributing about 70% of jobs to total workforce. Of the new jobs created, 80% of them relate to family businesses. These global data for the year 1993/94, with the changes occurring in the economy have varied surely decreasing.

Family Business Succession are the backbone of our analysis, focusing our attention to aspects of driving succession of family businesses, involving not only the family members that form-in its dual role as owners and managers - and who will be their successors.

I hope this informcion on Family Business Succession has been very helpful.

David A. Hernandez
Source Family Business Succession