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It’s All in the Family…
Tips for the Family Owned Business
By: Douglas
M. Leavitt, Esquire
The vast majority of family owned businesses
fail to reach the next generation of owners as a
result of poor succession planning. Family businesses
face unique intra-familial succession issues that
can devastate a successful business if they are
not dealt with in advance.
While not an exhaustive list, the top succession
issues that a family business should examine include:
Reconfirm the goal or mission statement of the business
and identify the best personnel suited to carry
the stated goal forward.
The development of an exit strategy for the founding
members of the business that sets forth the exiting
members reduced role and future compensation (cash
and/or stock) going forward.
The development of a training program to educate
and/or mentor the next generation of leaders.
Reexamine compensation system and determine whether
members are being compensated fairly and establish
a system based upon objective criteria or goals.
Consider employment agreements designed to prevent
key personnel from competing with your business
during transition period.
Mr. Leavitt works in the Philadelphia office of
Danziger Shapiro & Leavitt, P.C. where he focuses
his efforts on assisting small to midsize companies
with all aspects of their operations. Mr. Leavitt
can be reached at (215) 545-4830 or at Leavitt@DS-L.com.
The information contained herein is provided only
for informational purposes and is not intended as
legal advice.
- Published in "The Alliance Report" February
2005 |
