NORTH BAY -- Transferring a family business from one generation to the next is more than legal paperwork, accounting issues and a question of management. It is family and it can get messy.
Judy Barber and Deborah Steinthal are advisers who work with families that are going through the process of handing down the business to the next generation.
Ms. Barber’s company, Family Money Consultants, is based in San Francisco and works with companies all over the greater Bay Area including the North Bay.
She has a background in marriage and family therapy and is a founding member of the American Bar Association’s Psychological and Emotional Issues of Estate and Financial Planning Sub-Committee of the Real Property, Probate and Trust Law Section.
Ms. Steinthal is the managing director of Scion Advisors, located in Napa. Over the last seven years, her firm has helped more than 100 wineries successfully hand down operations to the second and third generations.
She was a senior executive for Oracle and Lockheed Martin and played a lead role steering organizations through major transitions joint ventures and acquisitions, and launching new businesses regionally and globally.
In a perfect world, the succession plan is written into the original business plan. But in family businesses, this is often lacking.
Particularly, said Ms. Steinthal, in the wine industry, where many people are in it for the passion of the wine and may not think as much about the business side of things.
“Our specialty is being general management and helping people build relationships and good decision making practices,” she said.
Points she mentioned that are key to look at and think about are how do you develop leaders, being able to communicate about what each member of the family wants and believes in, and making sure the shareholders are aligned, on the same page and that the business is being built to support their goals and needs.
“We are general managers,” she said. “We run businesses and we bring the value of having a process for everyone to communicate and we have the experience in the organizational development arena.”
The prepared client is educated on the project, she said. Going to seminars and reading books on the subject before seeking help from an advisor will help the family.
She said after becoming educated on the process of succession planning, two major issues to take care of are having formal meetings set up to talk about the business either weekly, monthly or whatever is appropriate and having an estate plan in place that everyone is comfortable with.
Ms. Barber said some things can be done early in life to help make a more successful family business.
“Very often in entrepreneurial families there is ongoing competition between siblings,” she said. “Although competition is not bad, working together as a team is healthy and helpful. When the kids are little, it may be having a combination family business meeting and vacation—take the kids rock climbing and rafting where they have to learn to work together.”