“Perpetuating Family Business Legacies Through the Next Generation”

Best Practices for Achieving Succession Success™

Continuation of success through the next generation of owners and managers

Family Business Succession Planning AdvisorsThe Rawls Group

1.800.777.2957info@rawlsgroup.com

www.seekingsuccession.com

Defining Family Business

“Family Business”

Two or more people gathered together for reasons other than money. Family is a choice, and often not

an easy choice Family requires both parties to

give benefit of the doubt

FAMILY BUSINESS

A commercial enterprise that is satisfying and fulfilling the expectations & needs of those critical to commercial viability::

₋ Regulators ₋ Creditors₋ Customers₋ Employees₋ Managers₋ Family

Definition of Success

The maintenance of commercial viability while

fulfilling the personal goals and priorities of those involved in

the process.

Definition of Business Succession

The continuation of success through the next generation of

owners and managers.

Definition of Succession Planning

Preparation for the continuation of success

in light of inevitable, probable and possible

contingencies

Core ValuesFundamental to succession planning best practices

Family Business: An Oxymoron

Family: A relationship environment of based upon Unconditional Acceptance

Business: A performance environment based upon Conditional Acceptance

You can not run a business like a family and you can not run a family like a business.

The Family Business Equilibrium

BUSINESSperformance

FAMILYacceptance

The perfect balance between family and business priorities.

The perfect balance between family and business priorities, is a worthwhile goal but an impossible achievement to maintain.

BUSINESSperformance

FAMILYacceptance

There Is No Perfect Family Business

The Metric of Success for a Family Business…

How Long it Takes to Regain Family Business

Equilibrium

Covenants – The Key to Unity & Teamwork

Proactive, written agreements between critical family members or managers of unequal power that confirm reasonable expectations and provide reciprocal accountability.

More formal than an assumption or verbal acknowledgement but less formal than a contract.

COVENANTS

Best Practices for Achieving Succession Success™

Best Practices for Achieving Succession Success™

1. Respect the Succession Matrix®

2. Lead3. Grow Family4. Build your Succession Bridge®5. Develop and Communicate Your Exit Strategy6. Create a Performance Culture7. Make No Succession Assumptions8. Be the Beacon of Optimism

INVOLVES MORE THAN BASIC ESTATE PLANNING

Owner Motivation and Perspective Personal Financial Planning Business Structuring Business Performance Strategic Planning Leadership & Management Continuity Successor Preparation Management Synergy & Teamwork Family Governance Family Dynamics

1. Respect the Succession Matrix®

Succession is a challenging

journey into the unknown that

demands leadership.

2. Lead

An effective LEADER is willing to

Define the culture Defend the culture Represent the culture Portray confidence Achieve trust Make plans Express expectations Offer encouragement Recruit team members

Demonstrate teamwork Assert accountability Consider alternatives Make decisions Prepare your successor Rise above failures

FAMILY:

Is the fabric that brings resilience and strength to the business enterprise.

Is the foundation of teamwork that provides self sustaining purpose, synergy and gratification.

Generates the passions of pride and enthusiasm that enables those with less to do more.

3. Grow Family

Identify and affirm those (blood and non-blood) who are a part of your business for reasons other than money.

Accept the motivations and gifts of your family

Family is the fabric that differentiates the ordinary between the extra ordinary.

Empower your managers and demonstrate your dependence upon them

How to Grow Family

Identify a successor with reasonable pre-requisites not including blood-line

Confirm qualifications

Prepare and deploy a Successor Development Program

Be a coach not a critic

Give them room to learn from mistakes

4. Build Your Succession Bridge®

Have a life outside of the business

Acknowledge that your exit is inevitable and be proactive

Establish and respect a reasonable time-line (3-7 years)

Establish an Outside Operating Board of Directors that provides a forum for your involvement

5. Develop and Communicate An Exit Strategy

Confirm your definition of success beyond dollars and cents.

Create performance benchmarks and SMART goals that support and affirm success definition.

Do not tolerate mediocrity

Establish performance metrics

Demand accountability

6. Create a Performance Culture

“We’ve made it; we’re losing it; we’ve got it done; my kids will work it out; my key manager would never leave me; my son will grow up; we will learn to like

our daughter-n-law; my attorney and accountant will take care of that; my family will grow a brain; I can do this; etc. “

7. Make No Succession Assumptions

FAMILY, TEAMWORK , HAROMY AND ORGANIZATION ARE NOT NATURAL BEHAVIORS

We are family and we are supporting one another on our Seeking SuccessionTM journey

You are critical to our success because everyone has a vested interest in business succession.

The success of the business cannot be greater than the success of the people that make it successful

8. Be the Beacon of Optimism

SUCCESSION PLANNING BUILDS VALUE!

Knowledge is Important, Care is Critical

“Perpetuating Family Business Legacies Through the Next Generation”

Best Practices for Achieving Succession Success™Continuation of success through the next generation of owners and managers

Family Business Succession Planning AdvisorsThe Rawls Group

1.800.777.2957info@rawlsgroup.com

www.seekingsuccession.com