Never do business with family, isn’t that the old saying? And then along comes succession planning, with its potential hard feelings, bad deals, lawsuits, nepotism-gone-awry and ruined trust. Never do business with family? Succession planning for dealer principals and their families takes that logical and time-honoured saying and sets it on fire.
With proper succession planning, there doesn’t have to be a lifetime of bickering and drama with family, but our feature stories posted online this week make it abundantly clear that the longer it takes to have THE conversation, the worse it’s likely to be.
But what is “proper?”
In one of our features, four dealers tell four completely different stories of their experiences, proving that there’s no right path, just the right conversation. Dealers ignoring their mortality, or those simply avoiding potential conflict, are also ignoring the needs of their families.
“A lot of dealers don’t want to think about their ultimate demise,” said Charles Seguin, president of Seguin Advisory Services. “They’re constantly trying to increase the business, but they don’t look after the family that they’re trying to create wealth for.”
According to the story, a whopping 43 per cent of “family firms” do not have a succession plan in place.
“Add to that the particularities of the automotive business, and a long-term plan becomes critical, especially if the intent is to hand the business over to one or more children.”
Complications seem most likely when there are multiple siblings trying to pass the reins to multiple children when only some of them are actually interested in — and even then might not be capable of — running the family business. Newfoundland dealer Rick O’Neill sums up the relationship with his brother in this way: “They say you should never say never, but I would be shocked if it ever repaired itself.”
So, how does one do business with family when we’re told to never mix the two? There’s obviously a lot of ground to cover, but the simple advice given by John Firstbrook, CEO of the Firstbrook Group of Companies, might be the best.
“Most parents want to treat their kids equally. The better idea is to treat them fairly.”
If you’re a dealer principal, don’t delay the inevitable. Please take a close look at our entire series examining the issue of succession planning.