In Baker Tilly, we are specialists in advisory for family business succession, a process in which family businesses are organized and prepared for the transfer of authority from one generation to another, guaranteeing the production rate and active presence in the market, generation through generation.
When using the word succession, we immediately connect it with retirement, independently if it is about a CEO of a public company or in the public business environment; the connection is immediate and almost without exceptions.
In private businesses, succession is connected to the founder or owner who is retiring, and sells to a third party or hands control over to a family member. Even if these definitions may not be incorrect, they do not portray precisely what should be the real focus of succession in private businesses.
This typical response about succession is one of the greatest barriers to the planning of effective succession, and it is many times the first impediment to be overcome.
The eventual retirement of a founder and/or owner can very well be the product of a succession process yet is definitely not its purpose. Succession is the process where the continuity of a business is guaranteed beyond its current management. This is accomplished by identifying and understanding the catalysts of the business’ capital value, the elements which will allow it to compete in its markets and grow and invest in these catalysts.
A focus on the determinants of the value of capital not only allow an effective succession, but it supports and allows for a cumulative growth of the capital value of a business during its life.
We think about the planning of succession as a process of evolution- Business Evolution. Allowing the cumulative growth of wealth from generation to generation while guaranteeing family unity, individual growth, and a sense of contribution, that is the essence of succession planning, that is Business Evolution. It is a process that must begin the day a business starts and continue throughout its life.