Voted #6 on Top 100 Family Business Influencers, most influential expert on Wealth, Legacy, Finance and Investments: Jacoline Loewen LinkedIn Profile
Showing posts with label business. Show all posts
Showing posts with label business. Show all posts

February 6, 2018

Planning is a bore compared with running a business but 3 simple questions can help a lot

Business owners make their wealth through concentrated efforts. The key to successful transitions involves focusing that same energy on planning the next stage of life and putting their wealth to work through investments outside their own companies.

Planning is a bore compared with running a business. If owners want to fully benefit from their lives' work, they need to grit their teeth and start tackling those three life questions before they get answered for them by life's forces.

The problem is, most owners avoid thinking about their next stage, their businesses don't get sold properly, and they lose the wealth they spent their lives building.

"One business owner that we came across had no transition plan, no successor, a son in the business who did not have an interest in running it, and no estate plan at all," says Maria Milanetti, a partner at
MarchFifteen, a consulting practice specializing in business transitions.

"The owner was 70 years old, running a highly successful business, and utterly oblivious to the risks for his family's future wealth."

This scenario is common in Canada.

Too often, the only part of a business that can be salvaged are its assets, but not a great deal more, leaving the family in a precarious position. The economy also loses a company that could have continued under new leadership.

Why is this sad lack of transition such a common scenario for too many privately owned businesses?

Milanetti says, "It's quite natural for founders and those running the business successfully to 'want to keep a good thing going' and to feel that they need to keep running the business themselves." 
 "Often they want to 'protect' others from this responsibility."
 But their reluctance to share how they make decisions or influence stakeholders with their next generation leaders can have long-term negative effects. Milanetti acknowledges it can be difficult to start the conversation around transition or succession. She recommends starting with the following three questions:

Have you thought about the next chapter in your business?
This question may prod an owner to be able to describe verbally a picture of the business within the next five years. As an extension of this question, it can be useful to include the next generation of leaders if there are any tapped to take over the business. Ask them to share how they want to build the business in the longer term. Like the son working with the 70 year old owner encountered by Maria, the truth will come out that they have no interest. Many next generation family members are not wanting to take over the business and doing this type of exercise will bring this urgent issue into the light sooner than later.

How can we plan that future together?
Suggest setting aside some time with a facilitator or business adviser and describe how critical conversations can be shared in a relaxed, reflective and safe situation. It makes it a safer process. It also means someone else brings energy and an outsider perspective to winkle out those tough questions business like to avoid but that need to be addressed.

What will your life look like in three years?
It can not be underestimated how difficult it can be to step away from a business, even if the Chairman role is still offered with a desk at the office. The emotional challenges of giving up control over a privately owned business and transitioning into a new role as “ex-entrepreneur” – whatever this new role may be – requires reflection about one’s identity and about other family members. This is not a natural state for most high-action owners. Dealing with this identity change can be very important to helping the transition to take place. However, this can be the most tricky question to bring up as it starts to deal with the prickly topic of the business transition. Peter Pan whispers that planning for life after the business means retirement, and that's for old people, not a dynamic business owner, no matter the biological age. That way of thinking can be disastrous for a family if the owner is forced to reduce his or her time at the business or stop altogether. It is better to address changes while everyone is healthy and has the time and energy.
 
"At every juncture," Milanetti says, "We recommend planning. That is planning for the mentoring of next generation leaders, for the transition between current leadership and successors and, most importantly, planning for the owner to be clear what will make their lives meaningful in their next chapter. These are not people who are used to doing nothing. they need to see the door opening to welcoming place."
 

Jacoline Loewen is director of business development of UBS Bank (Canada)
She is also author of Money Magnet: How to Attract Investors to Your Business
You can follow her on Twitter @jacolineloewen.
  
The article above first appeared in the Globe and Mail online.

January 7, 2018

Top 10 Questions for Families with Wealth

Family is important.
We can agree with that sentence as family relationships nudge, bump. poke at our course in life. You have heard the quality of your life is determined by the quality of your relationships. I would add, "family relationships." Many factors shape family relationships and money is one of them. Both when it is abundant and when it is scarce, money is key in shaping family relationships.
Money and its impact causes problems in family relationships. Who gets the money? Who receives the information about the family's wealth? Who actually has the control over that wealth - is it really family wealth or one person's wealth?
Tough questions that many choose to skip with resulting drama that fills movie scripts but also real lives.
Money also brings the opportunity to discover what money means to a family. It can be an open discussion to discover how a family can work together and clarify their thinking about the purpose of the money.
Family
What is money's purpose? What does money mean to the family?
Rather than divide the family, money can have a beneficial affect on bringing together a family and have a surprisingly beneficial effect on family dynamics. Relationships can be cemented.
In fact, the hardest issues facing families are usually not the money but the family relationship based and family based. You can begin to set a positive family dynamic by asking yourself questions and your family members these probing questions about finances and philanthropy.
In my experience, there are questions to get the process started. You can pose these top ten questions to each of your family members. What is most important is to listen and observe how family members respond is more important than the answers.

  1. What challenges do we face in regards to our family and to our money?
  2. What is our vision for our family's future?
  3. What is our family's definition of success?
  4. What principles will guide our decisions about asset allocation?
  5. What has been our experience of the family working together?
  6. How do we prepare our children to steward a financial inheritance?
  7. Should we bring our son or daughter in law into the conversation on finances and philanthropy?
  8. What are our core philanthropy interests and how did these become so important to us?
  9. How may we enable the next generation to create a shared dream with a family foundation while also fulfilling the founder's vision?
  10. How do we promote a togetherness while also promoting the individualism of each family member?


What do you think of these questions? Are there any more that you would add?

October 21, 2013

Build a more diverse client list, add value to your company's sale price

A business owner’s greatest worry when trying to sell the company is the prospect of receiving an inadequate price by the acquirer or being undervalued.
One of the drags on the value of a business is customer concentration. For owners planning to sell in the next five to 10 years, exporting is one way to diversify a customer base. “It’s too risky to export,” entrepreneurs often say when they’re asked about taking their brands beyond the Canadian market. “It would be a financial drain and a time suck.”
By building a more diverse client list you can eliminate the drag that is customer concentration
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September 28, 2011

Gloria Steinem is too political in Toronto

Vanessa Grant, McCarthy Tetrault, kindly invited me to hear Gloria Steinem speak in Toronto. Gloria is an admirable person who has made a huge change in attitudes in society and I was excited to hear her speak and wondered what her message would be.
It was disappointing to hear her start with the right wing's attitude to women's reproduction. According to Gloria, the right wing only want hearth and home and sex is for the reproduction of the species, nothing more. This Footloose style attitude has certainly not stuck around in Canada and as I sat with a table of dynamic female lawyers, all partners at McCarthy, I wondered if Gloria's activist message no longer had the same urgency for North American women.
I also wondered if the American right wing did believe that sex was all around procreation. Quite the image painted by Gloria.