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Closely Held Business Succession
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The Lovins Group has worked with conflict and succession issues in closely-held businesses that are not family owned.
In businesses that are owned by a founder or older partner together with a younger partner, similar issues have to be addressed. The older partner may own 50% or more and decisions have to be made for the future of the business. Can the younger partner run the business? Can the older one get comfortable transferring management and ownership, according to a plan? How can that be accomplished? Will the older partner be able to retire or think about planning for the time he can no longer work? How long is the younger partner willing to wait to get control of his/her financial future? What steps do they need to take to secure the future of the business and the future of both partners?
Doctors, lawyers, accountants, architects and other professionals often form partnerships that also require succession planning. The founders of a law firm, for instance, start out as the “rain makers” and often remain the major attractors of clients even as the firm grows. At some point, there needs to be planning in order to be sure that younger partners get the exposure and skill they need to maintain the firm’s success, when the founders need to retire. Without planning, the next generation of lawyers in the firm will have no faith in the future and will leave.
Other professional partnerships face the same fate unless there is foresight and planning.
Closely-held businesses and professional partnerships are also environments where people need to work closely together and to make frequent crucial decisions. Conflicts are frequently ignored, and the resulting tension affects working conditions as well as the ability of the firm to adjust to ever changing realities. The Lovins Group helps address relationships, resolve conflicts, and promote working as a team.
By Alan H. Lovins |
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