When Henry Hansel learned that his adult son Justin wanted to join the family's successful auto dealership business, he immediately went to work.
[caption id="attachment_88076" align="alignright" width="350"] Panelists at the Succession Planning Conference were (from left) Richard Stone, Richard Abbey, William Schrader, Jim Petray and Henry Hansel. Business Journal Publisher Brad Bollinger moderated.[/caption]
As a second-generation owner himself, Mr. Hansel still had fresh memories the process of transferring ownernship from his own father, Walter.
That process taught him many the lessons echoed by some of the North Bay's leaders in succession planning, wealth management, law and finance: that planning for a generational ownership transfer should start early, and transparency can help all parties to feel comfortable in their new roles.
"The thing that was important to me as we went through this -- how do we work this out so there's harmony with everybody?" Mr. Hansel said.
Speaking to a group gathered for the North Bay Business Journal's seventh-annual succession planning conference, Mr. Hansel recalled how three generations of Hansels have helped grow the company to 10 franchises and around 500 employees.
That growth, over more than 50 years, was something of a case study for giving family members a clear role and stake in the ongoing success of a closely-held company, according to Mr. Hansel and a panel of experts.
"This is not something to put off," said Richard Abbey, partner with Santa Rosa's Abbey, Weitzenberg, Warren & Emery and participant in an expert panel. He advised owners to consider where they are in their own imagined timeline, and that "these are hard issues that don't get easier as we get down the road.
It was in 1961 that Walter Hansel, Henry's father, opened a Ford dealership in downtown Santa Rosa. Sales growth soon prompted the elder Hansel to call on his three sons for help, with Henry agreeing to leave a sales position at a large computer firm for a new role at his father's company.
"We arrived in Santa Rosa with one child -- who's now a partner -- and another on the way," Henry said.
"It became really clear -- if we're going to run a family business, we're going to have to grow, and everyone is going to need to have a role," Mr. Hansel said. "It had to be done if we were to work as a family, and we pulled it off."
Jim Petray, a partner with the North Bay practice of Burr Pilger Mayer -- Accountants and Consultants and a long-time adviser to the Hansel family, reiterated the importance of delineating those roles early and transparently in family succession planning. Those talks should be ongoing, instead of a taboo subject between owners and their heirs.
"Things may not always be equal, but they should always be fair," he said.
As his own son expressed interest, Mr. Hansel, Justin and the company's business advisers spent more than three years crafting a plan that would move the son through a number of roles in the company -- sales, service and others -- and ultimately an ownership stake. Work interaction between the family members would be minimized during the first years, allowing Justin room to explore his place within the company and creating something of a firewall between the business and the family dynamic itself.
"Behind all the numbers, the balance sheet and all that, the business is made of people," said William Schrader, president and CEO of Santa Rosa-based Exchange Bank and another panel participant.
Mr. Hansel said he has recently stepped away from an ongoing direct management role for the company, focusing now on Hansel Auto Group's broader vision including a $20 million modern showroom complex in Santa Rosa.
Family involvement has also expanded, with a son-in-law recently joining the group and a trust established in which Mr. Hansel's other children are partners.
Speakers at the conference acknowledged that family transfer is only one option for business owners. Yet the impact of that decision can be large, including the owner's ultimately ability to have income for retirement.
"The decision to transition out of your business affects more than just you. It affects your family, your employees, your customers, your community that depends on the services you offer and your philanthropy to the community that your successful business provides," said Richard Stone, partner at the San Rafael-based wealth management firm Private Ocean. "Give great thought to the impact your exit will have on each constituent and try to develop a plan that is best-suited for all."
