Marine Fabricator January/February 2020 - 52

ShopTalk Business

You may have to
deal with family
conﬂicts of interest,
competing personalities,
dissimilar goals and,
of course, egos.

whether your family has the awareness
and commitment to give its all to the
company you worked so hard to build.
Your process should begin with a
series of conversations with family
members-sometimes individually,
sometimes in groups-to determine
whether their thoughts for the future
of the business are in sync with yours.
A smoother transition
Too often, specialists who assist
family members in a transaction
concentrate almost exclusively on
the technical side of the transition-
taxes, trust, shareholder agreements,
wills, etc.-when the most important
consideration is assuring family
harmony in the future. You can have
the greatest technical solutions ever,

Stay Connected
MarineFabricatorMag.com
Marine
neFabricatorM
abricator
MarineFa
MarineFabricatorMag.com
MarineF
feature
features
tures everything the
magazine has and more:
Exclu
Exclusive
Exclus
feature
content
conten
Industr
Industry
dustr news
updated daily
update
In-de
In-depth
In-dep
research
on the latest products
and pro
an
projects

52 Marine Fabricator | Jan/Feb 2020

but unless the family has agreed on
the future direction, it will be difϐicult
to make a successful transition. Here
are some questions to consider:
1. What is your timeline? When and
how will the changeover take place?
Maybe your desire is to oversee
the transition and gradually phase
yourself out of the business, but your
family wants the change to happen
as soon as everyone agrees to all
the conditions for the transfer.
2. What is each person's role? Clearly
define ownership shares and operating
responsibilities.Who gets what title?
Who is the ultimate decision-maker?
Define, in writing, each person's participation.Then discuss it, gain agreement
and move forward. It may take some
time to formally develop each person's
position and contribution, but doing
so will assure a successful transition.
3. How long will you stay on, and
in what capacity? This can be
a touchy issue because family
members may prefer that you step
away from day-to-day activities and
participate on a consulting basis
only. In general, a clean break is
beneficial for all parties, but there
may be certain advantages you
bring to the business-advantages
that are not easily replaced.
4. How will you be compensated?
Family members often buy the
business using cash that the business
accrues. Will family members put
in a personal cash contribution in
the beginning? Will you be paid a
lump sum or monthly payments, or
some other form of compensation?
How will the payouts affect your
taxes and those of the company?
If you stay on as a consultant, will
you receive regular paychecks
or be paid as called upon?
5. How will reporting be accomplished? What financial reports
will be provided and how often?
http://www.MarineFabricatorMag.com
Marine Fabricator January/February 2020

Table of Contents for the Digital Edition of Marine Fabricator January/February 2020
