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					“Preserving an Endangered Species…




           A   Presentation   By


          Gordon Wusyk
                    Of

      Predictable Futures Inc.
   - The Business Family Centre
  If you think…
 Retirement & Death




 Are “OPTIONAL” EVENTS
You’re in the WRONG room!!
FAMILY BUSINESS SUCCESSION
         PLANNING



 . . . “70% of all Family Businesses
      never make it to the second
             generation


 And 90% fail to reach the third.”
    Family Enterprise in Canada
•   Canada’s family businesses employ 4.7 million full-time and 1.3
    million part-time workers
•   Total annual sales of Canada family-owned businesses: $1.3 trillion
•   Most family enterprises are highly dependent on their current leader
•   Major leadership change in Canadian family businesses
     – 27% of family business leaders will retire in next 5 years
     – 29% will retire in 6-10 years
     – 22% will retire in 11-15 years
•   Most have no contingency plan covering the death or the disability of
    their leader
•   Only 29% have a succession plan
•   Unlike US counter part, Canadian family business owners see the
    generation of wealth as the primary role for the business. Keeping
    business in the family is a lower priority




•   Source: BDO Dunwoody/ Compass Report on Canadian Family Business
    (2003 & Survey of Canadian Family-owned Business by Deloitte& Touche for Tax Education
    and Research at the University of Waterloo (1999)
 From „FAD‟ to „FIELD‟ of study
•     Research over the last 25 years provides new understanding of family
      business & their issues
•     Growing number of family business advisors coming from a variety of
      disciplines
       – Family Firm Institute: Founder in 1983 by 22 professionals, now
          has 1200 members
       – Certification program now available for professionals
•     Clients are more knowledgeable and sophisticated than 10 years ago:
       – Families have access to many different educational opportunities
       – Families have access to many networks:
                 •   PFI
                 •   Family Business Network (FBN)
                 •   CAFÉ
                 •   BFF
                 •   ABFI
                 •   CEFE
                 •   FFI
•     Clients now expect advisors to be well informed


Source: CALU May 2005 – Evolution of the Family Business Field
All about PERSPECTIVE
The Interdependence of our Family,
 our Ownership and our Business
             Entities



         Family               Business




                  Ownership
Perspective of Each Entity
            Needs / Priorities:
            •Strategic Planning
            •Market Value Compensation
            •Results (targets)
            •Profits (retained earnings)
            •Competent, Competitive
            Staff
            •Systems for Management
 Business     & Control
            •Marketing
            •Quality Product/Service
            •Accountability
            •Regular Reviews
            •Solvency
            •Cash Flows
            •Entrepreneurial
            Perspectives
            •Fast, Efficient Decisions
        Family Perspective

Needs / Priorities:
• Nurturing
• Communications          Family
• Affection and Love
• Equality of Affection
• Individual Needs
• Personal
  Development
 Ownership Perspective
            •   Needs / Priorities:
            •   Return on Investment
            •   Return of Investment
            •   Equity Growth
Ownership   •   Stewardship of Assets
            •   Reputation of Owners
            •   Diligent Management
            •   Timely Reporting
            •   Responsible Board
            •     Selection
          Neglect one…


          Family               Business




                   Ownership




and risk destroying the whole system
     FAMILY BUSINESS SUCCESSION PLANNING
          A “Multi-Dimensional” Process
                   Family/Personal
                    Relationships
  “Death Tax”                          Tax Planning/
   Liabilities                         Minimization



                      Your
  Estate             Family            Wealth Management
Equalization                              “Game Plan”
                      Your
                    Business
    Legal                                 Retirement
Documentation                             Strategies


Protection From                         Creditor
  Family Law                           Protection
                  Charitable Gifting
IMPORTANT PLANNING DECISIONS



Are Often Made One At A Time

… But Even A Series Of What Seem To Be
  Quite Reasonable Decisions, Taken In
  Isolation,

Can Produce A Result That Is Unacceptable
  When They Are Combined …
What You Wanted
What You Got
     The Enigma of the Business Owner
               The Four Part Personality*

1) The Owner                        3) The Best
   – ROI                              Employee
   – Growth                            – First in, last
   – Income                              out
   – Exit strategy
                                    4) The Manager
2) The Aging Male/Female               – Hires
   – Physiologically                   – Fires
   – Psychologically                   – Organizes
The 7 F‟s of Balance

            Family

    Fun                 Fitness




                           Friends

Faith


                     Finances
          Firm
                 The Natural Conflict…
          The Family                                  The Business

Goals:                                   Goals: Profits, revenues, efficiency &
Support Family members                      Growth

Rules: Informal expectations             Rules: Written & Formal w/rewards &
                                            punishment
Evaluation: Rewards for who you are –
   unconditional                         Evaluation: Support conditional on
                                            performance
Succession: Caused by death, divorce
   or illness                            Succession: Retirement, promotion or
                                            departure
Relations: Deeply personal, of primary
   importance                            Relations: Semi Personal or impersonal,
                                            of secondary importance
Authority: Based on family position of
   seniority                             Authority: Based on formal position in the
                                            organization’s hierarchy

                         Conflict is healthy…
                       Unresolved conflict is not
        Roots/ Principles

•   M   Make Things Happen
•   A   Achieve Significance (vs. Success)
•   X   X out the Negatives
•   I   Internalize Right Principles
•   M   March to a Mission
•   I   Integrate all of Life
•   Z   Zero in on Caring for People
•   E   Energize the INNER Life
•   R   Re-align Rigorously
•   S   Stay the Course
If you don‟t have PROCESS




    you have a PROBLEM
                           The Process
            1. Clarification of
                 founder’s dreams of
                 the future
                                             2. Clarify family member’s
                                                  personal vision – for
                                                business & at a personal
7. Building the Legacy – review of                        level
            estate plan

                                                              3. Aligning the business
                                                              strategically to support
        6. Choosing and                                          family & founder’s
        Training the New                                         dreams and goals
             Owners

                5. Choosing The New Leader
                                                   4. Prepare the successors
  A Game Plan..




Or it’s GAME OVER
Role of the Family Business
         Consultant

             Ownership/Governance
                    System
                    Lawyers
                  Accountants
                Estate Planners
                    Family
                   Business
                 Consultants




  Business Systems
                               Family Systems
     Business/OD
                               Family Therapists
     Consultants
WISH BONE




                        JAW BONE




            BACK BONE
     How to Contact PFI

    Predictable Futures Inc
      The Business Centre
   Suite 1211 10104 103 Ave
         Edmonton, AB
            T5J 0H8
 www.predictablefutures.com
solutions@predictablefutures.com

				
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