Next Question- Advisors Stress the Importance of Succession Planning
January 5, 2009
Jeffrey I. Fialky, Esq. and Dennis G. Egan, Jr., Esq.
There are many things that people would prefer not to talk about — such as finances, their own mortality, and the strengths and weaknesses of others. Unfortunately, all of these issues are at the heart of succession planning, which is why many otherwise-practical business owners don’t broach this subject until it’s too late.
Advisors preach that people should start thinking about possible exit strategies before the ink on the first business plan dries, and they suggest that the basic approach is to always ask the question, ‘what if…?’ and always have an answer. This isn’t easy, but it’s necessary.
Kevin Vann was clearly distracted by the fact that he couldn’t remember who uttered the quote he was about to recite — but then concluded that it simply wasn’t worth it to keep searching his memory bank. It was the point being conveyed that matters. “Whoever it was said that ‘the sign of a good leader is one who is always working on his succession plan,’ said Vann, president of the Springfield-based Vann Group, which has consulted countless individuals and families on these often-complicated matters over the years. He, like others we spoke with, said that too many business owners don’t think about the matter of succession at all — or until it’s too late. Which is why those who advise others on such matters are quick and pointed in their emphasis on the other word in that phrase: planning.
And, quite often, they’ll add a third — ‘process.’ “Because that’s what it is,” said Dennis Egan Jr., an attorney with the Springfield-based firm Bacon Wilson, who consults with many of his corporate clients on this subject, which blends elements ranging from state and federal estate-tax provisions to sibling rivalry. And it is this mix and the need to contend with it that makes this is a process — and one that business owners ignore or procrastinate with to their own peril, because succession planning is about much more than who will occupy the president’s office when the current occupant is gone. “This is not just about continuity or identifying the best people to step in and how they’ll step in,” said Egan, “but also about protecting the estate of the principal; it’s a two-pronged approach.”
And while succession planning...
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by: George O'Brien
BusinessWest
January 5, 2009
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