Although successfully completing a transition of a family-owned business to a new owner can take years, 60% of entrepreneurs who are within 10 years of retirement age have yet to start discussing their exit plans. That’s why I was so pleased to be introduced to Ian R. Campbell and his new book, 50 Hurdles: Business Transition Simplified.

Campbell recently retired from a career as one of Canada’s foremost business valuators by successfully transferring the firm he founded almost 40 years ago to ensure its ongoing viability and his legacy.

Second, as a result of Campbell’s work as a business valuator and transition specialist, he has seen the good, the bad and the ugly results that can accompany the transfer of management and ownership of family-owned businesses. That experience has fostered a passion within Campbell to, as he says, “do it right.”

Campbell sees a tremendous opportunity for financial advisors to take a leadership role with their business-owner clients in the transition process. Consequently, his book is directed equally at both business owners and their advisors.

In Campbell’s view, there is an important distinction between “transition” and “succession” that can set the context more accurately for a transition. Succession refers to one person simply following another. Transition, on the other hand, suggests an orderly transfer, with direct involvement and influence by the current business owner/founder.

Another significant emphasis is on the division between transition of ownership and transition of management. In an age in which many entrepreneurs (including financial advisors) want a gradual winding down of their involvement in their business, compromises sometimes are required between what’s good for an enterprise and what’s good for the enterprise’s exiting owner.

Campbell’s book divides his 50 hurdles into nine categories, making it easier for readers to zero in on relevant issues affecting their personal circumstances. They are as follows, with my interpretation:

1. Fundamental business hurdles. If the business is not already sound and viable, the likelihood of a successful transition and long-term survival is diminished significantly.

2. High-level hurdles. Your business is an asset. In considering a transition, your overriding objective should be to protect that asset.

3. Family-business hurdles. The interests of the family must outrank the interests of the individual family members.

4. Family hurdles. Having mutual trust, respect and emotional cohesion among family members improves the probability of a successful transition of a family business.

5. Ownership and management hurdles: When family members also are employees or directors in the business, it is important to separate transition of ownership from transition of management.

6. Corporate governance hurdles. Good corporate governance, including having non-family members in key decision-making positions, results in a better transition outcome.

7. Valuation, planning and liquidity hurdles. Formally valuing a business on a regular basis measures its success or failure. Good business planning and cash management lead to an easier transition.

8. Employment policy hurdles. A business must have written rules that specifically address family-member employees, including qualifications, compensation and accountability.

9. Shareholder disputes and related legal hurdles. Shareholder agreements and dispute resolution mechanisms are particularly important in family businesses.

For advisors, this book offers an easy way to start a conversation with your business-owner clients about the importance of managing what is likely to be their largest asset with the same prudence as for their other investments.

50 Hurdles: Business Transition Simplified

by Ian R. Campbell,

www.50Hurdles.com;

250 pages,

$27

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