WorldWide Drilling Resource

76 SEPTEMBER 2015 WorldWide Drilling Resource ® 20W BUCYRUS ERIE CABLE RIG Completely restored, mtd. on 2000 Int’l 4700. Asking............$35,000 OBO See at BillPentzWellService.com Orlando, FL 407-579-5606 2003-575 1785-1200 0', '&1+ * 0',) + !')0 $#*+ $$ . " - #+ )0.*"4 *"00)&)%$ 2-1% 5 3 ),#( #-*-/ 0.%#)"* /"1% +),20 1(% #-*-/ 3 +1( 0.%#)"* /"1% 6 ./)#% !)/% -.% 1/)$%,11--* #-+ ! / /)** ),% ",$*),% -, -1"1),' -)01 ),% #& 1785-102 ! ! " ! # Family businesses are responsible for a staggering 50% of gross domestic product, 60% of U.S. jobs, and al- most 80% of newly created jobs. However, only 52% of these companies are confident in the next generation’s ability to grab the family torch when the time comes. Once they reach a certain age, it’s imperative for suc- cessful business owners to address the issue of succession planning. What is succession planning? In a nutshell, it’s the process of preparing to hand over control of a business in the least disruptive way possible. Though many put it off for years, the process can be a great opportunity to continue a multigenerational institution that honors the founder’s mission and values long after they’re gone. Family businesses have a unique set of challenges when it comes to succession planning. Emotions can run silent and deep, especially when money is involved. You may not know the extent of emotions around the table until you’ve begun succession planning. Maybe you have family members working for you already, or you want your family to take over your business. Perhaps some of your family members feel enti- tled to take over the company. If any of these scenarios apply, then you definitely need to start succession planning early with a professional advisor. The first step by any qualified advisor should be a frank discussion of what you really want for your family and business. The discussion will require breaking down some universal myths among small business owners, and confronting powerful forces of emotions and family dynamics. Let’s take a closer look at some myths and realities of family succession planning: Myth One: There’s Plenty of Time Reality: Time will be your friend or enemy. You can plan for succession during your active business years, or you can wait for the more chaotic, expensive planning to occur once you’re gone and the choice is no longer yours. Myth Two: It’s Easier Just to Sell Reality: Finding a willing buyer for any company is rarely just a matter of hanging up a “for sale” sign. Whether you intend to sell the company or let family take over, valuing a business is difficult, and cannot be done just once. A good advisor will recommend an independent valuation of your business, along with a periodic view of the valuation. Myth Three: When I’m Ready, a Successor Will be Ready Reality: Over 1/3 of junior generation family business members have no knowl- edge of their senior generation’s transfer plans. Establishing a successor involves more than just naming a person to take over; it also means preparing the successor with on-the-job training. We’re not simply talking about who will own shares or assets in the future; we’re talking about the one who will do the dirty, thankless, unending tasks which make the business an asset worth preserving. Whoever follows in your footsteps should be truly qualified. They’ll need support and loyalty from the rest of your team. If they cannot lead as well as the competition, then maybe you should think twice about about having them lead your business. Though it may fulfill a family dream for a relative to take charge, if the person does not have sufficient skills or respect, the dream could become a nightmare. An estimated 40.3% of family business owners expect to retire by 2017, creat- ing a major transition of ownership in the U.S. Over half of those planning to retire have yet to name successors. Succession plans are scary for many owners reluctant to give up control or lose income. However, a plan which transfers company ownership to an eventual suc- cessor over a long period of time without taking control or income from the original owner is entirely possible. Planning ahead will help guarantee emotional, as well as financial success down the road for your family and business. A professional succession planner can guide you through the process. Is your family ready for the future? Family Succession Planning Compiled by Amy White Associate Editor WorldWide Drilling Resource ®