Succession Planning (CONT’D FROM PAGE 1)
Plan Ahead How did that approach work in the case of Henry and Steven? We’ll reveal the answer later in this article. First, though, let’s cover the lessons learned from the story. Foremost among them is the importance of moving the succession topic off the back burner. “The biggest mistake family businesses make is not proactively bringing the next generation into conver- sations about who will take over the reins of leadership before they really have to,” said Tim Vorhoff, Senior Vice President of CreoValo, a merger and acquisition advisory ( creovalo.com ). “That’s an easy trap to fall into when you get caught up in the daily tasks of running a business.”
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The result is a company with operations entirely depen- dent on one person. “Too many family businesses fall into the habit of operating completely through the owner,” said Joe Anto, Managing Director at PCE Investment Bankers ( pcecompanies.com ). “That individual maintains all the relationships with customers and vendors.” When an un- expected event throws a monkey wrench into operations, the result can threaten business survival. “The most common unexpected disasters in business are what I call the five Ds: death, divorce, disability, dis- agreement, and displacement,” said Vorhoff. “The last re- fers to such things as sudden shifts in the market, or the loss of a long-term lease.” When there’s no obvious person to take charge at the onset of such an event, the result can be deteriorating customer support, lower employee morale, and a resulting nosedive in financial performance. In the worst-case sce- nario, the family will be forced to sell the business—often at a fire sale price because of the need to raise cash for in- heritance taxes. Buyers, too, will be reluctant to purchase a rudderless operation with no visible leadership in place. Start Early Adequate preparation takes time. “Family businesses often think of a transition as the passing of a baton in a race,” said Devin DeCiantis, Managing Partner at Lansberg Gersick Advisors ( lga.global ). “In their imagination, one person is slowing down and another is speeding up. At a singular moment in time there is a tradeoff and the busi- ness is off to the races with a new leader.”
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Len Prazych at 518-366-9017 lprazych@nvpublications.com
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22 August 17, 2026
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