Generational Transition for a Private Family-Owned Business

The father and two sons of a $3 million family-owned business wanted to have a smooth and effective generational transition process.  

The company was a second-generation family-owned business.  Multiple family members from the second and third generation were involved in the business.  The company enjoyed a reputation for quality products and responsive service.  Father and sons wanted the family members active in the business to occupy roles in the company that either fit their strengths and allowed them to contribute or lead to them to the advancement of the company or to exit the business.  

The family members needed to develop a buy/sell agreement to control and direct the stock between stockholders and the company and from one generation to the next.  The company also needed to identify talent at the third generation, develop that talent, and provide opportunity for that talent to bloom and add value to the business.  The company also wanted to grow and develop the infrastructure required to support this growth.  While doing all of this, the company wanted to avoid conflicts that would place the business or family in jeopardy.  

CMA conducted an intergenerational transition process involving developmental assessments of potential successors and in-place family members, coaching and leadership development with members of the third generation and in planning with family.  

Based on work with the company over several years, a buy/sell agreement was put in place.  The roles and responsibilities were defined for family members or the family members pursued opportunities outside the family business.  In addition, the members of the next generation were developed and stepped up in terms of their leadership and strategic contribution to the business.  Over a matter of 13 years, the company increased 13 fold in terms of revenue and increased its profit margins.