Q: I've worked in our family
business almost all my life, starting out sweeping the floors on
the weekends when I was a kid. Since I graduated from college,
I've climbed up the company ladder and feel that I'm now
ready to take over the business so that my dad (who's 70 years
old) can retire. But when I talk to dad about retiring, he laughs
and says "Retire, reschmire. There's a lot more miles left
on my tires, so stop trying to push me out the door." The rest
of my family agrees it's time for Dad to retire and start
enjoying life while he and Mom are still active and healthy. What
can I do to get Dad to do the right thing for himself, his family
and the family business?
A: Your whole family should give
you a big pat on the back for having the wisdom and courage to talk
to your dad about the dreaded "R" word while your dad is
still active and healthy. Your question about how you can help your
dad to "do the right thing" needs to be examined on three
different, but related, levels: family issues, succession planning
and tax planning.
Family Issues
There's a wise saying that "A family business is just
like any other business, only more so." What that means is
that the joys, sorrows and the ups and downs that every business
owner faces can be dramatically amplified and multiplied when the
business is a family business.
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For example, it's bad enough to have to endure the tension
of having a long-running dispute with your business partners about
the direction of the company. But it's far worse to have the
same long-running business dispute erupt into a verbal brawl during
a family holiday get-together or during Joey's third birthday
party.
So before you say anything further to your dad about the dreaded
R word, you must be very careful to take the family temperature and
thoroughly understand both the family and business history. You
must avoid taking actions that could not only wreck the company,
but also destroy family relationships.
If you think this is a difficult task, you're right. Doing
this type of a "tiptoe through the minefield" of a family
business can be both very difficult and immensely frustrating,
particularly if you are simultaneously trying to run the business
with the same family members that you are trying to negotiate
with.
Many times, it's a great idea to start the process by
enlisting the help of either a trusted business advisor (such as
the business's accountant or lawyer) or a specialist in family
business mediation to provide you with guidance and a level of
objectivity along the way.
The main thing to keep in mind in coming to grips with this
level is that while it is possible to buy another business to call
your own, the same cannot be said for your family relationships. So
be sure that your motto in dealing with family issues is
"handle with care."
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