44 To keep the business going, the entrepreneur

must take steps to groom successors ...99

Business: Managing the Present,
Planning the Future,’’ a one-day

‘ seminar plus specialized counsel-

ling. (For more information, call
1-800-361-2126.)
“After our most recent seminar,

, many of the ‘founding fathers’

DOLLARS AND SENSE

WHY. DO so many. family: .
businesses fail; and: what

“cam you do to improve the

chances of survival if you.
‘have your own business? -"”

“Some 70% of family. a

-. businesses don’t make it to the.
second generation, 90% fail to: *
reach the third generation — and:
of those; only.1% still include.a’

: family member,’’ said Len Winter,
manager. of strategic planning for
the Federal Business Development
Bank (FBDB).: a :
-! “Phe reasons for this : a

- discouraging survival rate vary

” from generational conflicts and ”,

sibling power struggles to the. -
failure of the founder to, deal with

succession,”’.he added...’ .

So the FBDB’s 78 branches
across ‘Canada offer.“ Ramily - «

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FHURSDAY, DEC. 23 :

: Send us your event listing $e
. ONGOING EVENTS:.
First Thursday each month. La Leche

_ League meeting. Support, networking

didn’t change their approach but

‘at Ieast they heard the views of

family members for the first
time,’’ Winter said.
~“And-many adult children were

_ surprised at mother’s strength and

position in the business.’’

Here are some highlights from
the seminar.

To help the business develop
and succeed, you could name a

family council made up of family

members (possibly of several gen-
erations) who are involved or have
an interest in the business.

Larger businesses could also
have a board of directors while

‘smaller companies could have an

advisory board, each made up of

. external resource people and the

senior executives of the business.
To keep the business going, the

entrepreneur must take steps to .

groom successors (bringing heirs

_into the business, gaining the co-
\. operation of senior management,

arranging leadership transition)

: | &. info for . breastfeeding mothers &

pregnant women 10 a.m..N.S.
Unitarian Church, 370 Mathers Ave.,
W.Y. Info: 985-3751.

To Jan. 2. Park and Tilford Gardens’:
‘Annual

Lights
a.m.-9:30° p.m.
Ave., N.V. Info: 984-8200.

Meditation Night. Info: 984-8982.

Display. open. 9:30

. Women Survivors Self-Help Group.‘
2 Ist & 3rd Thurs. each month. 7 p.m.

N.S. Family Services Society, 303-126
E. 15th St., .N.V. Limited enrolment.
Info:.988-5281.

eee

Therapeutic Touch. 7:30-9:30 p.m. on
the Ist & 3rd Thurs. each month.

Lions Gate Hospital, seminar room A. .

‘Everyone welcome. Info: Janice, 929-
1996 or Katie, 929-2930.

ae

g

at 333 Brooksbank ~

and plan the succession (perhaps
buying life insurance, making a
will, signing a power of attorney).

Most entrepreneurs and family
businesses go through five stages,

Too often, business consumes
the entreprencur in the early
stages, leaving little time for fam-
ily,

Even in later stages, the process
of bringing heirs into the business
is rarely planned and any training
is haphazard.

Here is what you can do during
the various stages to correct these
problems and help ensure the sur-
vival of the business.

Stage One (entrepreneur’s age
20-40): During this intense period
of building the business, the en-
trepreneur typically runs the whole
show,

He/she should make time for
family, encourage heirs to learn
and teach them about the
business.

Stage Two (40-50): Sales climb
but profits don’t always grow.
The entrepreneur still handles
everything, often through fear of
delegating.

Any family members in the
business get shunted around.

Instead, the entrepreneur should’

Take Off Pounds Sensibly (TOPS)
meeting. 9-10:30 am. W.V. United
Church, 2062 Esquimalt Ave.,, W.V.
926-9177, 13 North Shore locations.
Info: 985-6538.

Ist & ard Thurs. of each month, N, S.
Amateur Radio Club meets rm. 103,
Pacific Marine Training Institute, 265

. W. Esplanade. 7:30 p.m. Non- hams

welcome. Info: 985-2570.

, Bingo, 7 p.m. Eagles Hall, 170 W. 3rd

Su, N.V.

eeon

WV. Adult Community Pops Band

welcomes new members. Info: 926-
1919,

Thrift. Shop open 2-8 p.m. Mt

Seymour United Church, 1200

Parkgate Ave., N.V.

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encourage potential heirs to gain
experience outside the business
and hire them only if they have
the necessary skills, and then have
senior executives help train them
and plan their careers in the
business.

Stage Three (50-60): The
business should resume profita-

bility. The heirs niove into senior -

positions -—- but only the effective
ones should be encouraged while
the others should be urged to seek
a career outside the family
business.

The entrepreneur should plan
the future of non-family execu-
tives. The family council should
meet regularly to choose a suc-_
cessor.

The entrepreneur signs the nec-
essary legal documents and begins
to pursue other interests.

Stage Four (60-65): The en- °
trepreneur begins to delegate
more. Unless firm plans are in
place for the succession, the en-
trepreneur might say he wants to
retire but doesn’t really want to let
go.

With prior planning, however,
the successor could be in place
and would run the business in
tandem with the entrepreneur.

Stage Five (65 and older):
Again, without succession plan-
ning, the entrepreneur might want
to retire but won't know how.

Even if he does hand over the
reins, he'll still keep an eye on
“‘my business” — and come back
to the office on the slightest
pretext.

On the other hand, with the
successor in place, the en-.

trepreneur can easily withdraw
from the business.

It's also important to use the? ©
appropriate advisers. — typically
accountant and lawyer — to make
sure succession passes smoothly,
and to minimize income taxes.

Mike Grenby isa North — .
Shore-based columnist and in-
dependent financial adviser who
works with individuals; he will
answer your questions as space
allows — write to him c/o The |,
North Shore News, 1139 Lonsdale’
Ave., North Vancouver V7M 214. -

INTERESTED IN SAFE}
ALTERNATIVES? a

Please Call: :
The North Shore's only’
Full Service Investment Firra

981- 6600. °

RBC)
“DOMINION.”
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