Chapter 2
Getting ready

If you have done nothing to plan for succession, you must start today. The critical first step, mentioned in Chapter 1, is to formalize all policies and procedures. If your management style is to retain all decision making, your business is truly at risk. Decide how things should be done routinely, but let others implement.

Once this critical infrastructure is in place, look ahead. Begin conceptualizing:

• How and when do you want to exit the business?
• What options will work best for your stakeholders?
• What gaps in the business need to be filled before the transition?

The longer you wait to plan for succession, the harder it will be to put something in place that meets your needs.

Identifying resources
You shouldn’t try to plan for succession by yourself. Include key managers or employees who at this point may know more about the business than you do. Other trucking company owners also are an excellent source of information and insights. Or you may seek out consultants who specialize in trucking or who specialize in succession planning. Your banker is another resource. He needs to be involved anyway because he probably will be the one who finances the transition of the family business to the next generation.

It’s critical to include family, whether or not they are involved in the business. One situation in Georgia involved a mother who did not participate in the business on a day-to-day basis. But the kids went to mom when they disagreed with their father’s decision on a matter. Anyone who is part of the family dynamics – even if they are extended family – should at least be aware of the succession planning process.

Others to involve are your attorney, financial planner, trust officer and insurance agent. And your CPA is involved from beginning to end.

Integrating all interests
Ensuring that a succession plan addresses the needs of the business, its owner and the family is often tricky business because these three interests often are in conflict. Succession planning is a delicate process that must balance sometimes very disparate needs. Some business owners put the family system ahead of the business, while others put the business ahead of all else. In reality, family, business and ownership systems are equally important to the long-term success of the family business. None should be neglected.

Often, owners consider using the “do-it-yourself” approach, and quickly find that coordinating all of the needs, advisers and information is much too complicated without expert assistance. Frankly, the process often takes a toll on the relationships of the stakeholders, so it is imperative that you bring in a professional facilitator to help gather candid information, build a shared understanding of the differing viewpoints and arrive at equitable compromises.

Defining needs
It’s imperative that you begin by defining what your exit timing is, what you need from the business after you leave and how the business will continue on without you. This will most likely involve a series of one-on-one interviews where your adviser asks questions like those in Exhibit 1. (See page 9.)

At the same time, you and your adviser should determine what the other key stakeholders in the business need or want. This is a parallel activity that will help define the succession plan parameters.

The best way to start with the family is to convene a meeting at a neutral site and make sure everyone can attend. Explain that the purpose of the meeting is to discuss plans for the future of the business. Describe the desire to do long-term business planning for the good of the family. Explain that each family member will have input into the ultimate transfer option implemented. Stress that it’s important for each family member to give honest and direct feedback (positive and negative) about their hopes, goals and concerns in regard to the future of the business.

Don’t limit the topic of this session to the mechanics of succession planning. Rather, make it about the long-term plans for the business. It is a time to share the future vision and how to get there. One of the major elements of that vision and strategy is your exit. But by broadening the focus, you can relieve some of your family’s stress and anxiety.

Who are the other stakeholders besides family members? Most often these will be loyal employees that the business needs to keep on. If an owner dies or retires, these employees may not have the same level of confidence in the new owners and be tempted to leave. Chapter 3 discusses the family planning retreat in more detail.