Succession Planning

Succession Planning

Succession planning differs from exit planning in that it is a sub-component, and refers to the transition of the family business to the next generation.  This transition is most commonly from the creator (first generation) to their children (second generation), however there are cases like Italian winemaker  Antinori, who is one of the oldest family owned businesses in the world and is currently being operated by the 26th generation.  Whether you are transitioning the business to the second generation or the 26th, it takes planning to be successful.

Everyone working with family businesses is familiar with the challenges that go along with succession.  It is said that only about 30% of family and businesses survive into the second generation, 12% are still viable into the third generation, and only about 3% of all family businesses operate into the fourth generation or beyond. (http://www.familybusinesscenter.com/resources/family-business-facts/) Whether or not the above statistics are true, it is obvious that transitioning a family business presents certain challenges.  The opportunity for a successful certainly increases when with guidance of an experienced advisor.

In addition to traditional exit planning skills, succession planning requires the ability to integrate planning with the business, ownership structure and family dynamics.  Traditional exit planning through a sale to an independent third party can successfully be transactional in nature.  However, a successful succession plan requires an integrated, long term, strategic solution capable of dealing with a complex system.  In other words… family.

Succession planning is not just an area of expertise for us.  We live it.  M3 Advisors and Martin Financial Group have successfully transitioned from one generation to the next.   Having gone through the same process that we take our clients through provides a huge strategic advantage in dealing with potential challenges and creating solutions.  We’ve been there, done that and can help you do the same.

Check out these links for some interesting facts and figures:

http://www.sauder.ubc.ca/Programs/Business_Families_Centre

Fee-Based Planning offered through M3 Advisors, a State Registered Investment Advisor. Third Party Money Management offered through ValMark Advisers, Inc., an SEC Registered Investment Advisor. Securities Offered through ValMark Securities, Inc. Member FINRA, SIPC, 130 Springside Drive, Suite 300 Akron, Ohio 44333-2431*, 1-800-765-5201. Martin Financial Group, LLC and M3 Advisors are separate entities from ValMark Securities, Inc. and ValMark Advisers, Inc.

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