Big Grower September 2020 - 11

MANAGEMENT
circumstances, and often leaves them hanging without clear direction.
As a result of the COVID-19 disruption, however, right now is the perfect
opportunity to recognize those who have stepped up and think through
the implications long term to address
what adjustments could be made.
With a success rate of just 30% for
transitions from the first to second
generation of family agribusinesses,
and even less chance for success (10%
or less) as second and third generations
attempt to transition, it's staggering
to see how little businesses take it
seriously, and take action before they're
forced to. As succession planners, we
can tell you, the true life stories are
even more harrowing.
Most family business
owners pride themselves
in not just building a
business, but rather
CHOOSE FAMILY OVER FEAR
" Change is never easy. You fight to
hold on. You fight to let go. " - Daniel
Stern, The Wonder Years
As I am not here to instill fear from
the sad fact that a first-generation
business has a 70% chance it will not
survive a transition, let's discuss the reasons for this failure in an effort
to facilitate your success. First and foremost, as the saying goes, " A
failure to plan is a plan to fail. "
It's important to acknowledge why 81% of family operations have
no succession or transition plan. According to a study by Concordia
University, 50% of family businesses feel it's too early to think about it.
Let's face it, this is their baby and it's what they love doing.
Twenty-nine percent feel they cannot afford to take the time. We get
it, you're busy pouring your blood, sweat and tears into keeping the
business running. The other 21% state they don't have the proper advice
creating a family legacy
to pass along.
or tools to get started. And for many, about 13% of respondents, the
process is just too complex to tackle.
But today's disruption is forcing family businesses to make tough
decisions now for the future of their
business. Communication is critical,
and openness to family to share in
the decision process is necessary for
success. It will be important to discern
what items fall under a management
decision, an ownership decision, and
a family decision. Recognizing that
different decisions will require different
voices to weigh in is important to get
through today, and plan for tomorrow.
IS IT TOO EARLY TO THINK
ABOUT SUCCESSION?
" It's never too early, " advises Lance
Woodbury, partner and family business
advisor at K·Coe Isom. " Your personal
choices will always dictate what a
healthy time frame is for you and what
you foresee for the business on your
terms. "
While some owners want to stay involved forever, others look forward
to transitioning the day-to-day management of the business while being
available to pass on wisdom when needed. And there are even a few who
look forward to wiping the dirt from their hands and riding off into the
sunset to pursue other interests.
Woodbury adds that no matter when you intend to transition,
remember that the business is more valuable - for your personal
wealth and the longevity of the business for the family - if it's running
smoothly and you have the right management and successors in place
should anything unexpected happen.
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Big Grower September 2020

Table of Contents for the Digital Edition of Big Grower September 2020
