Situation and Objectives:

  • Sharon (53) and Tom (57) are husband and wife co-owners and officers of a specialty electronic component manufacturing company with $13 million in sales.
  • Sharon and Tom both receive salaries from the company as well as rent for the lease of 2 business real estate properties, which they own personally. They also own 4 other parcels of valuable real estate: their primary residence, a vacation home and 2 local mixed use warehouse/office properties.
  • They have 3 married grown children: Alex, Barb and Charlie. Alex is actively involved in the business. Barb just came back to work for the company after a several year stint with an unrelated business she co-founded with a couple college friends. Charlie works in the music industry.
  • Treating all their children fairly was an important concern.


  • Sharon and Tom are now confident that they can safely leave the business while maintaining family harmony and financial security…
  • The company created a strategic vision and process for executing it, allowing the family to work together to set future direction, and protect Sharon’s and Tom’s legacy and business value.
  • By evaluating and developing the leadership and management skills of Alex and Barb (the children who are active in the business) and non-family key employees, the risk of failure was minimized and family stress reduced.
  • Sharon and Tom were able to transfer the business to Alex and Barb for the “lowest defensible value”, assuring that taxes would be minimized.
  • The process insured that Charlie (who was not active in the business) would be included through the use of non-business assets.

Why Succession Planning Matters

  • The family business is a valuable asset that can change the lives of your family members for generations.
  • Half of all companies have no succession plan, and the percentage is even higher in small firms or those that have been in business for fewer than twenty years.
  • 72 millions baby boomers are now in the workforce and preparing to retire in the next ten years or less—probably some of your best employees.
  • 84% of owners want to pass on the business to their children, but less than half actually do so.
  • Nearly 12 million family businesses will change hands over the next 10 years and they employ over 60% of working Americans.
  • Only 3 out of 10 family businesses survive the second generation and only 1 in 10 survive the third.
  • Over one-third of family businesses have no procedures for dealing with disputes between family members.
  • Accountants tell you what has happened and what you owe, lawyers protect you from the worst case, but who helps you actually build and protect the value in your business?

The statistics provided above have been derived from a variety of surveys of closely held business owners including: the PricewaterhouseCoopers 2007-2008 survey of nearly 1,500 closely held companies; the 2007 survey of 800 closely held businesses by the University of Connecticut School of Business Administration Survey; and the 2003 Arthur Andersen/Mass Mutual American Family Business Survey.

Strategic Planning 3.0 Whitepaper

Every leader has a sense of purpose — an inner drive to support the success of the mission — whether it is a non-profit, community collaboration, or private firm. A good leader also has a sense of adventure, balanced by sound judgment. To be successful, a leader needs a good “map.” A map is a critical tool to help a business leader find out:

  • Where she is (the business environment)
  • Where she is trying to go (goals and objectives)
  • How best to get there (what action is required)
  • How to avoid dangerous terrain (what market activities might be predicted) 

Without a good map, the firm may be led into a quagmire — or worse...  

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