This is how many business owners feel. Mary started the ABC Manufacturing Company forty years ago when she was twenty-five. She worked long and hard. She raised three “fine” children, her son Mark, her daughter Joanne, and the business. All her children prospered and her daughter joined her in the business ten years ago. Joanne has been instrumental in expanding the business internationally and as a result of her efforts, the business has doubled in sales and profits.
While Mary has often asked Mark to join her and Joanne in the business, Mark has repeatedly said no. He has never been involved in the business. He lives nearby and is a partner in an investment banking firm.
One day Joanne told her mother that she’d like to discuss what her future role in ABC was to be and who would own and manage it when her mother retired. Mary told Joanne that she had no intention of retiring any time soon and that “Joanne would be taken care of” when the time came. When Joanne pressed her to make plans for the future that would protect Joanne and her family, Mary replied: “There is no way I am giving up control of my business.”
Unfortunately, by not facing the “what ifs” and planning for them, the business owner is giving up control over the business. Planning enables the owner to exert control over the business even after she is unable to physically or mentally continue to do so. For example, without proper planning, what would happen to ABC if Mary became disabled? With planning, she could provide who was to take over management of the Company. Suppose Joanne decided that she was going to leave ABC, since her future was not “guaranteed”? With proper planning, Mary could “guarantee” Joanne’s future in the business without giving up any control.
The business, and all those who count on it for their livelihood, deserves to be given the best chance for success, even after you are no longer involved in it. If you fail to plan for the “what ifs” (some are not “what if”, but “when”), then you may give up control, or be forced to give up control, at a time not of your choosing.
The attorneys at Levin Ginsburg have helped many business owners plan for the possible and the inevitable. Those business owners have found that rather than giving up control, they were able to retain control until such time as they no longer desire to retain control. To discuss succession planning, please contact:
firstname.lastname@example.org or (312) 368-0100