Boomers & Gen Y: Family Business Succession Planning

Dan Blank -- Expert Business Source, 3/20/2007 7:56:00 AM

As the baby boom generation looks to the next generation to manage their family businesses, they are confronted with some interesting differences between the two. BusinessWeek looks at how “Gen Y Rewrites the Rules for Family Biz,” with some interesting insights:

• Unlike previous generations, for Gen Y work-life balance isn't just something to strive for—it's a given.
• Gen Y also expects to be doing meaningful work right away.
• Gen Y'ers get along better with their parents than previous generations did.
• Gen Y’ers are especially eager to prove themselves, but baby boomers are in no hurry to retire.

In another article, BusinessWeek offers tips for handing over control of a family business:

• Set a specific goal.
  Understand the purpose of succession planning for your business. Is your focus to provide lifetime employment for as many family members as possible, maximize profits to uninvolved family shareholders, or pursue some other goal is essential to charting a smooth course.
• Get a professional valuation of your business.
  All planning will call for an accurate and current valuation of the family business to move forward. Get a valuation of the enterprise by an experienced business appraiser with good credentials.
• Determine how to pay estate taxes.
  Transferring any business valued at more than $2 million will likely trigger a graduated federal tax that can prove debilitating. Work with a certified public accountant to come up with your own customized strategy to protect your business and assets.
• Plan for retirement now.
  One common error is for the current leader to neglect to provide for adequate income and financial security during his or her own retirement. Setting up a retirement savings plan and trimming pre- and post-retirement lifestyle expenses are two ways to overcome this common obstacle.