Tag Defusing the Family Business Time Bomb

January 28, 2019 by Jenifer Bartman

MEDIA: CBC News Network Weekend Business Panel (January, 2019)

Starting off the New Year in studio for the CBC News Network Weekend Business Panel, alongside John Northcott and Elmer Kim.

As our world continues to experience economic, political, and technological change, our discussion reflected just that:

Turmoil in Venezuela. In the face of leadership uncertainty and devastating economic and social challenges, potential US sanctions could significantly impact Venezuela’s oil industry. What could this mean for Canada?
Ontario enhances autonomous vehicle pilot program. Changes to an existing program will now allow some automated vehicles on public roads with just a passenger on board or a remote operator monitoring the vehicle. When could we expect to see these vehicles on the road?

The Venezuela story is a reminder that developments in far away countries can impact us here in Canada, including in terms of business and the economy. In the event that Venezuelan oil exports are sanctioned by the US, refineries in that country will be seeking supply to meet the needs of their operations. Canadian crude oil could fill this gap, however, meeting such opportunities successfully requires more than just identifying solutions at a high level. Logistical challenges and limitations have been in the news for some time and relate to the need for Canada to continue to focus on developing a global trade strategy for oil. This approach raises the likelihood that opportunities could be successfully met as they arise; it is also simply good business.

The advancement of riderless cars, one step closer to being approved for regular road use, reminds us that the future is now. Although there is still additional work to do in terms of testing and refinement, the practical use of autonomous vehicles represents tremendous change for many, including car manufacturers, insurers, companies that utilize vehicles and drivers, and consumers. Are they ready? I expect that many are facing the need to work quickly to keep up with the pace of these exciting developments.

And so, 2019 begins, with what should be an interesting year. Special thanks to CBC News Network for the on-air mention of my new book, Defusing the Family Business Time Bomb; I sincerely appreciate it!

in Media / News 1 comments

January 21, 2019 by Jenifer Bartman

Escaping the Demographic Trap

Many family business leaders have the expectation that their company will eventually be passed to the next generation and maybe even to the one after that. Perhaps this is why they established the company in the first place: to provide for the family’s financial needs over the long term, building wealth and security in the process. Having possession and control of this type of “economic engine” brings with it the power of options and the benefits that are associated with not having to rely on others to earn an income. Achieving longevity isn’t so easy, however, as research indicates that successful passage of a company to future generations is not typical.

The current environment in which we live is characterized by a number of important realities that impact long term business survival: many companies are led by aging business leaders, most do not have a formal succession plan, and the next generation is getting restless. Couple this with a backdrop of significant disruption, in terms of technological, economic, political, and social factors and it’s easy to recognize that these days are like no other.

Let’s briefly consider what the current demographic environment means, in the context of family businesses:

Business leaders are remaining engaged with their companies for a longer period of time, as traditional retirement has become less of a rite of passage and people are more inclined to lead an active life that includes work. The other side of this trend includes realities such as needing to work longer to support lifestyle expenditures and indecision around how a company should be transitioned (and family squabbling doesn’t help).
Potential successors are seeing little advancement in terms of succession, resulting in the decision to consider other options, beyond that of the family business. As successors themselves get older, this is understandable, however, it can blindside a founder, leaving them to wonder how their “succession plan” could have gotten away. This could have serious implications for the future of a company, leaving the business leader to revisit the issue of succession entirely or little in the way of viable transition options.
The number of potential successors is limited, in that the next leader is only a realistic option if they have the necessary skills, interest, and capital to undertake a transaction. This group is further reduced by family members who have moved on to pursue other opportunities, in a demographic group that is already smaller than the generations ahead of it.

When it comes to demographics, you can run, but you can’t hide. At some point in time, all companies will require new leadership if they are to continue to operate, and the extent to which this can be done successfully is largely dependent on one thing: thoughtful and formal transition planning. As simple as it might sound, research has shown that the vast majority of business leaders do not do this.

Learn more about the implications of demographics and how you can avoid the “trap” by reading Defusing the Family Business Time Bomb. Use promo code familybusiness to save on the price of multiple copies, and pay no taxes and shipping costs on all purchases of our book, through January 27, 2019! The future of your company and family’s income stream will thank you for it.

January 8, 2019 by Jenifer Bartman

BOOK RELEASE: Defusing the Family Business Time Bomb

I’m pleased to announce the launch of my new book, Defusing the Family Business Time Bomb! This isn’t just another family business book. Why? Because family businesses are facing the most explosive challenge in a generation.

The reason? While it is quite normal for a typical family business to be inundated with challenge and change, seldom have so many potential threats been evident:

Demographic factors. The majority of aging Baby Boomer business owners do not have a succession plan and don’t appreciate the reality that there are a limited number of potential successors.
Disruption of key industries. New, complex business models and rapid digital/technological advancement have the potential to reduce valuations and make transition to new ownership either irrelevant or much more costly.
Dramatic change in the global economy. Makes strategic planning difficult, increases competition, and could escalate the cost of doing business, thereby shrinking profit margins.
Uncertain financial times. Complex tax changes, restrictions to family income sprinkling, and a new clawback of the small business deduction all impact profitability, investment opportunities, and access to capital. This challenge could be especially difficult for young entrepreneurs or successors.
Typical family business problems. The conflict, apathy, sudden or emerging illness, or control issues can affect relationships, decision-making and, ultimately, the health of both entities: the family and the company.

Business leaders are under siege, but do they know it? These issues are significant and very much present in the current business environment, with additional evolution and challenges occurring with each day that passes.

Whether you are a long-time business owner getting ready to transition out or a new entrant to the “gig economy”, poised to grow and expand, you will appreciate this book for its contemporary and practical advice. It brings a common-sense approach to the challenges associated with building a company that has the potential to be sold to someone else in the future. This from two experienced authors and business leaders who have helped the owners, executives, investors, and professional advisors with whom they work to prepare for the most explosive challenge in a generation: the retirement of the Baby Boomers and transition of their companies to a new guard, who face pitfalls and opportunities of their own.

Join me and Evelyn Jacks on this important journey for your business and your family. Order your copy here!

in Business & Strategic Planning / Business Transactions / Leadership / Management / News / Succession Planning 2 comments