Business Decisions: Planning for Succession

Family businesses come in all shapes and sizes, from mom and pop car dealerships to ones like Seament, a global cement company run by founder Alex Bouri and his kids, Maurice, Mark, and Charles Bouri. Though the way they run their businesses and what they do might vary, there's one thing that all family-operated companies have in common: the decision of succession. If an owner should decide to pass the business on to his or her children, how would they even go about it?

According to FORTUNE, it starts with an exit plan. A business owner has to sit down with a financial advisor and come up with a comprehensive business succession which will detail the business owner's personal and entrepreneurial goals and resources. In this meeting, he or she will take into consideration the financial and legal stipulations of transferring the title of a business.

Advisors stress that business owners give the process due thought. After all, you only get one opportunity to make this move, so you have to be sure that it's exactly what you want.

The biggest decision you'll have to make: do I give the business away, or sell it to my child? The answer must be made based on your level of financial security. If you're secure enough to simply give it, take into consideration your limit of yearly gift tax exemptions. A financial advisor can look into these and see if you're entitled to discounts for giving the business as a gift.

Or, you could make an intra-family sale as a way to sell the business to your son or daughter, which involves selling the company's stock for an installment note in return.

With the proper advisor, the process is an easy one. The decision itself – how to go about it, and if you should allow your kin to take over your business at all – is often the hardest part.

How to Earn Authority for Your Business

Take a minute to think about a few industries.  When you think about computers and tech do the words 'Apple' and 'Google" come to mind?  Or do you think about Alexander F Bouri when you think about construction?  A flashy marketing campaign and heaps of discounts may be able to bring in a few more customers, but there is something that every business needs that money can't buy: authority.  Authority can't be earned overnight, but if you follow these steps you'll be on the right track.

Innovate

Google and Apple didn't get their success from peddling the same product to people; they became popular because they're always looking for ways to improve their products.  If you think your business could use some fresh ideas you may want to consider hiring an innovation consultant.  These consultants work with companies and marketing firms to think of ways to improve products and services.

Don't Ignore Change

Do you remember when there was a Blockbuster Video on the corner of every neighborhood?  In the 1990s they were the undisputed kings of home entertainment, but by the end of the 2000s the company was bankrupt.  Many people blame Blockbuster's failure on ignoring key market changes, and even claim that the company chose updating their services in favor of focusing on products that were unpopular with consumers.  When you notice change in your industry don't fight it, take time to figure out how change your product and services to stay in sync with popular changes.

Always Communicate

Your customers are crucial for your business' success and ignoring their opinions to focus on the opinions of CEOs and other company higher ups have the potential to lead to disaster.  Don't just focus on keeping in touch with "big name" clients, take time to reach out to your clients with a friendly phone call or a short e-mail and ask them how they're enjoying their products and services.  Your willingness to communicate and listen will keep customers happy and let you know about any things they may need.

Praising Employees the Right Way

Ask any entrepreneur, whether they're an international business owner like Alexander F Bouri or they own a small Laundromat down the street, they'll say how important it is to treat your employees well.  Making sure that your employees feel like a needed and valuable part of your company is important.  It's good for employee morale, it motivates them to keep working hard, and it lets them know that you've taken notice of their hard work.   Some people say that there's no wrong way to give praise, but when you're in a professional setting things can get a little tricky.  Praising is always helpful, but there are some ways you can make sure that your complements are heard and taken seriously.

Avoid Generic Compliments

"Your work here is valuable"

"You're a hard worker"

Those two compliments may sound nice, but they're very vague about what the person being complimented has done to deserve praise.  When you're complimenting an employee you should directly mention what they did so that they know what you're happy with.  "The overtime hours you worked to finish the Johnson project really showed me what a hard worker you are", sounds a lot better than just saying that someone worked hard.

Recognize Important Events

Did your employee reach their one year anniversary of working with the company?  Do you know if today is the day that an employee will be finishing an important project?  It's important to recognize important events in the work place; it shows that you're very aware of current happenings and that you want to acknowledge your employee's hard work and determination.

Include Other Employees

If an employee recently did something that deserves recognition, let your other employees know.  Send out a company e-mail that highlights the good things an employee has done, or call a brief meeting with your department to talk about the exceptional work an employee has done.  Letting all of your employees know about important achievements creates a close work environment that employees feel comfortable working in.