April 2020 - 39

MANAGEMENT
But are the family members qualified to take the helm?
Last names don't matter when it comes to the financial
success, continued employment of team, industry
relationships, and reputation of the business built by the
generations that have come before the NextGen. If those
ingredients are missing, then the answer may very well be " no. "
The aftermath of this can include: high employee turnover,
customer exodus, poor financial decisions, lack of strategy
and, ultimately, the demise of the business.
The road of family businesses that have made this poor
choice is littered with bankruptcies and the brutal truth that
the family wasn't the best choice for the business to be " built
to last. "
But if the answer is " yes " ...
A strong family rooted in success, transparency, forward
thinking, and financial and emotional intelligence is a superb
choice to take the business into the next decade or two - or
even three or more. Succession
planning is just one part of the
overall strategic plan for any
great business model.
A Five-Year Transition
A client in Bermuda made
the decision that the son
would be taking the helm
over a five-year period, and
the employees, vendors,
community and customers
were all made aware well in
advance of this transition. The
father was a rooted community
icon and was hesitant to " let
go " of the tiller.
The analogy we used was two trees side by side. The
operations while protecting the employment of valued
workers. Check with your financial planner and attorney
for more detailed information regarding this option of
" built to last. "
When asked " What is the single most important aspect
you are focusing on when it comes to succession and
transition? " Alan Jones, owner of Manor View Farm in
Monkton, Maryland, said, " Selecting the most suitable
people to take over, manage and develop the business. "
Alan was also asked for his best advice for those who are
contemplating a similar journey. He responded, " Start the
process earlier than you had thought necessary - it takes
a lot longer than you expect. Plan for how the financial
implications (for both seller and buyer) of any succession
plan will be structured. Also plan for the inevitable! "
Getting the right people in the right seats on the bus is
Another option in a family
business is leveraging the
vital to having any business on the journey of succession/
transition planning arrive
safely at the destination with
the least number of detours,
dead ends or disasters.
So, whether you choose
existing bench of employees
to carry the company into
the future.
son's tree can't grow in the shade of the father, and we
don't want to just to cut the tree down, so let's make a
five-year pruning strategy and remove large branches
every year over the next five years.
* Year one branch was financials.
* Year two branch was large account engagement.
* Year three was vendor relationships and purchasing.
* Year four was technology advancements and
improvements.
* Year five was one deeply rooted tree standing without
branches - and a wonderful tree that had " grown up "
over five years.
Each year was also wrapped in team building, leadership
development, sales and operational excellence, metrics,
measurements, and determining what success looked
like over the next 10 years - a true success story of both
strategy and succession all in one.
Employee Stock Ownership
Another option in a family business is leveraging the
existing bench of employees to carry the company into the
future - an ESOP (Employee Stock Ownership Plan). This
is beneficial to both owners and employees and allows
the owners to retain control of business decisions and
your NextGen family
members, employees or an
ESOP, your option of " Built
to Last " is one centered on
legacy, longevity, and longterm
planning.
Common Considerations
On the Built to List road,
there are a fair amount
of parallel efforts to
consider as the Built to Last
model - value building, staff development, clarity in
financial reporting, inventory management, technology
enhancements, capital improvements, debt reduction, etc.
In this model, there are many reasons for the decision to
sell - quality of life, the harsh reality that no employees
are in a position to buy, a financial hardship, no interested
family members to shepherd the business into the future,
an unforeseen life event, or someone was kind enough
to stop by and ask " are you interested in selling your
business? "
The acquisition market in the green industry has never
been better and there are a few regional and national
brands that are looking to expand their footprint into
existing or emerging markets.
There has never been a better time to sell!
Time to Sell
Rockledge Gardens in Rockledge, Florida, find
themselves with the perfect opportunity to find the right
caretaker for their beautiful location along the emerging
market of the Space Coast of Florida.
While the family members and spouses continue to be
engaged in bringing their passion, energy and insights to
the existing business, and the realization that they will
not be engaged in the long-term future of the business,
LGRMAG.COM | 39
http://www.LGRMAG.COM
April 2020

Table of Contents for the Digital Edition of April 2020
