The Business Planning Process Excerpts from: Becoming a Wealth Transfer Specialist Learn More

When succession planning does come about, here's how the it usually works:

At some point, the business owner becomes motivated to sit down and plan for the future of the business-perhaps due to a magazine article he read or maybe an article in the local newspaper about a local business lost to death taxes. Fear suddenly grips the business owner so he pays a visit to his trusted attorney or accountant to discuss plans for minimizing estate taxes and passing on the business.

The typical advisor rightfully sees the business owner as his or her client. They talk for a while about the desires of the owner as they relate to his estate and business. Many of these issues are being considered by the business owner for the very first time.

The response to the question, "What do you want to see happen to the business when you die?" is often a poorly thought out response that reflects the level of consideration this question has received in the past. "I want it to stay in the family." In response to other questions, the business owner often expresses the wish that "all the children must be treated equally."

Given this information, the typical advisor would probably create a will or other testamentary device that would divide ownership of the family business equally among the heirs of the business owner at death. Therein lies the problem.

However, all family members often do not have the same love for the business that the entrepreneur has. Sometimes they even hate it! To leave the business equally to a mix of individuals who may or may not want to operate it is a recipe for disaster. The better approach is to leave the business to those who are willing-and able-to operate it successfully and compensate the "non-business" heirs in some other way. But how is the business owner to know which heirs are which? Communication.

The FBR Process

The process I've developed to deal with this issue is called the Family & Business Renewal Process. The goal of the FBR Process is to understand more completely the wishes of not only the business owner, but everyone else in the family as well.

At the core of the process is the business owner's desire to do what is best for both the family and the business. Without the unconditional support for the FBR Process on the part of the business owner, it is no more likely to succeed than any other planning process. With the backing of the entrepreneur, however, the FBR Process becomes a powerful planning tool with real prospects for success.

If that is so, why don't all business owners simply adopt the process, or something like it, and turn around the dismal business succession statistics? It's because the process calls for an entirely new set of skills and a change of attitude on the part of the business owner. Change of this magnitude is never easy. Finding the right person to guide the family through the process is likewise not easy. It calls for someone with planning expertise and the additional skill of a facilitator and counselor.