Hidden Dragons: Handling Family Conflicts in Buy-Sell Agreements for Business Succession

White, Paul E.
January 2007
Journal of Financial Planning;Jan2007, Vol. 20 Issue 1, p70
Academic Journal
Buy-sell agreements are used as the foundation for transferring family-owned businesses across generations. For the process to be successful, relational issues are critical to understand and address. Astute financial advisors will understand that business succession can involve complex family issues and will use a process that addresses these. • Two common approaches by advisors can create problems: (1) avoiding the relational issues or (2) trying to resolve all the relational issues present in the family. Rather, the goal is to address only those relational issues intertwined with the business succession plan. • The article discusses five common relational traps advisors can be drawn into by family members that will create significant obstacles. These include one family member keeping secrets from another family member, the advisor becoming a messenger between family members (to avoid conflict), or attempting to make everyone feel good and have no negative interactions. • The article suggests practical steps to avoid these relational quagmires. The process should include clarifying and articulating the current owner's goals for themselves and the future of the business, investigating the goals and desires of the primary owner's spouse, discussing the next generation's desires for ownership and participation in the business. • Another key is attending to other possible hidden relationship issues such as conflicts among family members, important past family events, and loyalty to long-term, non family managers.


Related Articles

  • Strategic succession planning requires foresight. Walsh, Thomas // Business Journal (Central New York);2/25/2005, Vol. 19 Issue 8, p18 

    Provides some advice on planning for the next generation of leadership in closely held businesses. Examples of succession points that can hamper a business and ultimately cause it to fail; Need to identify capable candidates for each of the key positions and detail specific steps to transfer...

  • Keeping it in the family. Ross, Emily // BRW;8/5/2004, Vol. 26 Issue 30, p110 

    Focuses on the succession practices of Australian family-owned businesses. Percentage of family business owners planning to pass on their businesses to people other than family; Businessowners anticipating a management buyout; Assumptions made by family business owners about the future...

  • Succession planning: reflect on all concerns. Van Wert, I. Gregg // American Printer;Jul2004, Vol. 233 Issue 4, p36 

    This article discusses matters about family business succession. Founders must identify key issues and build consensus among family members to every extent possible. Some children will want to remain, or become, an integral part of the business. Others may not. Clearly understanding who fits...

  • The Successsion Process And Leadership In Lebanon Family Businesses. Beyrouti, Nouri // Journal of International Diversity;2010, Issue 3, p7 

    The most significant difference between family business and non-family business is the way in which executive succession takes place, and more specifically, the aspects of inter generational family business transfer. The purpose of this paper lies in the fact that it offers empirical evidence...

  • Family Affair: The Emotional Issues of Succession Planning. Nawrocki, Tom // Journal of Financial Planning;Jul2005, Vol. 18 Issue 7, p34 

    This article examines the emotional issues of succession planning. Probably the most difficult situation to deal with is one in which the owner has children, some of whom are active in the business and some of whom are not. Herbert Daroff of Baystate Financial Services in Boston, Massachusetts...

  • Bridging the Gap Between Generations. Daks, Martin C. // njbiz;8/29/2005, Vol. 18 Issue 35, Special Section p36 

    Focuses on the importance of an early succession plan to family business owners. Background of the succession plan developed by the owners of Hannon Floor Covering; Factors to consider when passing one's business to the next generation; Options available for business owners who are planning to...

  • Family Business Dynamics: Aptitude, Chemistry, Planning. Meijer, Hank // Grand Rapids Business Journal;4/19/2004, Vol. 22 Issue 16, p24 

    Explores the dynamics of family business succession. Factors to consider in accepting or passing a responsibility in a family business; Components of succession planning; Significance of stewardship to a family business.

  • Handing off the family biz. Anglebrandt, Gary // Crain's Detroit Business;4/13/2015, Vol. 31 Issue 15, p0011 

    The article discusses family-owned businesses and the issue of succession planning. Topics include the Family Owned Business Institute at Grand Valley State University in Grand Rapids, Michigan, and its data that shows that most family-owned businesses have no formal, written plan of passing the...

  • Plan Ahead. Nofel, Pete // MAN: Modern Applications News;Dec2007, Vol. 41 Issue 12, p6 

    The author emphasizes the importance of having a business succession plan. Although most businesses are run by their founders, he thinks that far-sighted shop owners are those who look to the future and plan for the time they step down to enjoy the fruits of their labors. According to the...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics