When to start 

It is never too early to develop a family business succession plan. If you currently own a jewellery business and know some of your children, nieces, or nephews are interested in becoming part of it and you are hoping to keep it in the family, then you are ready to start. The sooner you do, the less conflict there will be and the easier the discussions and decisions surrounding succession, family, and the business will become. 

Here’s an anecdote. I had a client who was ready to retire. He was nearing his late 60s and had three adult sons who were more than competent to run the business, as they had been working at the company for more than 10 years. The brothers were becoming impatient to take over from their father, as they all had children of their own that may be interested in working in the business in the near future. The owner sought guidance from a number of different advisors: an accountant, lawyer, financial planner, and an insurance broker. However, he never felt ready or comfortable to formally transfer management responsibility or ownership to his sons. 

Why is that? When I first met him, it became clear to me the owner’s issue was not related to the technical components of the succession plan (e.g. estate freeze, tax, valuations, trusts, shareholders agreement), but rather with the non-technical components, such as family dynamics, work ethic, personal and business values, generational differences, and sibling rivalries. He understood three people who don’t get along and can’t make a decision together could easily destroy the business he spent his life building. 

By implementing a number of succession guiding principles supported by some family business rules, the owner felt much more comfortable about transferring the business to his sons. One of the most important family business rules for this family was agreeing to a dispute-resolution process that would allow them to effectively address and resolve conflict. Today, the sons run a successful family business and even have some of the next generation working alongside them. This would not have been possible without a process to deal with their differences. Every year they review their constitution with the entire family and celebrate the opportunity and legacy they have been provided.