Hotel & Motel Management - January 7, 2008 - (Page 16) 16 Family Business Matters IN THE details Be prepared for changes Involve important parties Make plans ahead of time Communicate responsibilities H&MM January 7, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Drill helps uncover, solve succession issues uccession planning is a method of forecasting future events and predetermining their outcome to the closest possible scenario. It is a vital step in the process of preparing next-generation family members to inherit opportunity, responsibility, values and wealth. Thus, succession planning must involve close advis- S By Mike Henning H&MM Columnist ers, key personnel in your hotel operation and family members. Examples include change of business leadership, coordinated communication, the passing of wealth, control and family leadership. These outcomes are enough to challenge the very best people we have in our society, let alone those who chose to do little planning and just hope it all works out. Near the end of an engagement with a business-owning family, I have a meeting with the family members, advisers and external board members. I tell them that this is their succession fire drill. The situation they will address is the premature death of dad and/or mom. Some of the fire drill questions: Where are the wills, trusts and other important documents located? Are they up-to-date? Where are the keys and passwords needed for access to these documents? What funeral arrangements have been prearranged? Are important documents being safeguarded by others? By whom? Who will be acting successor for the company if not already named? Who will notify customers and suppliers? What immediate sources of cash are available? Did mom and dad pen a statement regarding guiding principles for running the hotel sites? How will transition of ownership of the company take place? Do we have a leadership succession plan to follow? Will we follow it? Under what terms should we position the company for sale? How will dad and/or mom’s death have an impact on banking relationships, and what can we do about it? What will the impact be on suppliers? What 10 key factors need to be monitored on a daily basis? Did dad and mom leave us with a final statement anticipating questions and giving general advice? Are the heirs prepared to inherit and manage the wealth so it becomes a blessing and not a burden? Are relationships among all family members, including inlaws, healthy enough to minimize emotional turmoil upon execution of documents? By having the family, board members and advisers come together and deal with these questions, as well as others appropriate to the situation, we have a foolproof way of discovering voids, flaws and areas needing updating in the succession plan. hmm@questex.com Mike Henning is the founder of the Henning Family Business Center, which was established in 1985 and is headquartered in Effingham, Ill. He can be reached at hfbc@mikehenning. com and www.mikehenning.com. CIRCLE NO. 127 http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition http://www.hunterhotels.net http://www.hunterhotels.net http://www.hunterhotels.net http://www.hunterhotels.net http://www.mikehenning.com
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