My Family's Brush with Succession Planning

By Yudkin, Robert | The National Public Accountant, October 2005 | Go to article overview

My Family's Brush with Succession Planning


Yudkin, Robert, The National Public Accountant


Although he grew up around the business started by his grandfather in 1908, my teenage father was forced to grow up in the business when his own father unexpectedly passed away. His entry into, and exit from, that business illustrate the importance of succession planning and the ability to adapt.

The topic of succession planning evokes dread and emotion for many business owners. Some simply ignore the subject, but those able to face reality take action to ensure they will control not just their destiny, but also their company's future. My father's early lesson served him well down the road.

Fast forward 30 years. The business had grown and prospered under my father's direction. I was coming up on my senior year in college and looking forward to graduation. Although my father and I never discussed life after college, both of us assumed I would come into the business. One day during the summer before my senior year, Dad called to tell me that someone had made an unsolicited offer for the business. We talked and he assured me that he would keep the business if I wanted it; otherwise, he would sell it.

My decision--probably one of the best ones in my life--was to sell, and I based it on three factors.

First, accepting the offer allowed Dad to play tennis in Florida every day for the next 20 years. Second, I had no real passion for the business, despite having worked in it. Third, and perhaps most important, I recognized the difficulty in working with my father.

A Time to Sell

Dad was fortunate. He was busy growing the business and did not expect a white knight to knock on the door. According to Jay Stevenson, an attorney and CPA specializing in estate planning, that is precisely the time to sell.

"The best time to sell a business is when it is a going concern, and the key business owner/manager is healthy and still actively involved in the day-to-day operations of the business," says Stevenson, who says that my family's experience was extremely unusual. "The sale or transfer of any family-run business requires advance preparation, sometimes several years before you are really ready to put the business on the market or actually start the process of transferring it to the next generation." He emphasizes that there are different tax consequences depending on how the sale is structured.

Alan Tolmas, CPA/ABV, CVA, a business appraiser and an expert in Employee Stock Ownership Plans (ESOPs) with Hill Schwartz Spilker Keller, LLC, in Dallas, Texas, agrees. He believes that a minimum of three years is needed to develop and implement a good succession plan, although most companies need between five and seven years.

Why so long? Numerous tasks need to be accomplished, including deciding to act and following through on it, identifying the professionals to help, valuing the business, identifying the succession strategy and players, and actually implementing the plan. Tolmas shares that many business owners, "who want to get out of business, don't want to get out completely. It is 'their baby' and they don't want to let it go. Many owners have a difficult time separating because their business has been such an integral part of their life."

Tolmas shares two interesting statistics. First, according to Joseph Astrachan, Ph. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

My Family's Brush with Succession Planning
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.