On December 11th, Dave Franzetta, co-author of “Changing Places,” talked with radio host, Kerry Lutz, on FSN, the Financial Survival Network. This is Part 2 of a 4-part edited version of the radio interview.
Changing Places is a helpful guide for small business owners planning to exit the company they built and move on with the rest their lives.
KERRY LUTZ: When it comes to exit planning there is always a lot of baggage in these family businesses, a lot of emotions that have never been worked through, and a lot of issues that are unresolved; especially when you have a powerful father figure involved, too, and suddenly he dies. So what could the father have done to avoid his children ever having to be in that situation in the first place?
DAVE FRANZETTA: What he could have done is to have worked through the details of what would happen after he died. Everything was all right as long as he was here to settle issues between the brothers. What he didn’t do was to work through what to do when he’s not here. How will we settle things between Nate and Will when I’m not around? Who do they go to settle disputes? And what happens when one of the brothers wants out of the business; what will the other one do? It’s really a question of working through all of the different possibilities and potential scenarios and “what ifs,” and determining what’s going to be best outcome personally for the people involved in it.
This particular dad had a real challenge, because he loved his business; it gave him the opportunity to be the kind of person he wanted to be. And he just assumed that both of his sons wanted to be in the business and would love it and would want to engage in the business in exactly the same way he did. It is a real danger in succession planning to assume that others want the same as what you want.
KERRY: Assumptions are always very dangerous, especially in family situations of any kind. So, David, in the midst of all the baby boomers coming of age, your business must be booming, what with so many people needing help with succession and exit plans for their businesses.
DAVID: It is crazy. Think about the numbers involved. There are something like 30 million small businesses in the US, and about two-thirds are owned by baby boomers, like me. Every 57 seconds, for the next 17 years, some baby boomer who owns a small business in the U.S. will turn 65. It’s like that magic age, when you suddenly start thinking about life after your business. With so many businesses in need of succession and exit plans, it’s natural that there would be lots of advisors and counselors that would like to help with succession and exit plans. But some are much more qualified and experienced than others.
When it comes to exiting a family business, things can get very tricky. Choose counsel wisely
To be continued…stay tuned for Part 3 in the next post!
Check it out: “Changing Places: Making a Success of Succession Planning for Entrepreneurs and Family Business Owners”(published by AuthorHouse).
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LAGUNA NIGUEL, CA – (DAVE FRANZETTA > SIRI > BLOG POST> 01.09.13 > 8:25AM PST)