10 Anticipatory Thoughts for Family Owned Business Survival

“While entrepreneurship is rife with optimism; anticipatory prudence can reap significant dividends for the survival, growth and ultimate maximum monetization of value from the Family Business.  Many of these points seem fundamental – but amazing how often they are missing in action:

1) Does structure of corporation anticipate current & future growth?

2) Founders disciplined to reinvest in & sustain business – how best to monetize their investment upon retirement or hand over to 2nd generation?

3) Personal after tax dollars or lower business taxed dollars for 1st & successive generations of shareholders?

4) Shareholder loans vs. business collateral to financial institutions?

5) Deficit of  Business Continuity / Succession Planning by 85% of Canadian business owners

6) Personal & Business Wills in place?

7) Transitions from employing Family friends to professionals.

8) How to fund the taxes upon death of Founders to avoid liquidation; diminish a lifetime of work and guarantee continuity.

9) Mentoring / Educating Next Generation to anticipate rigors of change & transition

10) Next Generation ultimate management / operations “take over” or retain professional management company to take over firm?”

 

Excerpted with acknowledgement & thanks  to Susan Yellin, Insurance Journal of Canada,  May 5th, 2017.

 

Brian Etherington is the Chairman at Etherington Generations; a risk management firm that specializes in family life insurance and estate planning. He was appointed a Member of the Order of Canada in 2004 and a recipient of The Queen’s Golden Jubilee Medal in 2002 for community service, as well as The Queen’s Diamond Jubilee Medal in 2012. He is a Founding Chair of the Special Olympics Canada Foundation  and a chair on the advisory council for the 2019 International Youth Games presented by Special Olympics Ontario.