For a business founder, their ”investment” in the business is multi-dimensional: financial and emotional. Selling the business isn’t just an event, it’s a journey. So argues the author of this article, an author, advisor and figure in the wealth management industry.

There is a lot of commentary at the moment about business owners selling and transferring what they have built. It is an emotional and challenging process and the field is littered with stories of owners wondering if they had sold a business too cheaply, or that the process was arduous and complicated. Advising such business owners on these transfers is a big growth area in the North American wealth management industry.

To talk about the topic is David Werdiger, who is an advisor on intergenerational wealth transfer, a succession planner, adjunct professor, speaker and author. This news service is pleased to share these views with readers and invite responses. The usual editorial disclaimers apply.

The number of businesses bought and sold hit a record level in 2018 (1). Yet, the majority of business owners fail to prepare for a sale-ready operation, leaving five to six figures on the table for any one transaction. This article gives three key essentials to being prepared and optimizing for a better profit.

Read the full article at https://www.fwreport.com/article.php?id=186400

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties to a win-win-win result. Family Business Advisors-Counseling Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship #salereadybusiness #generationwars

Ageism is the basis for much of today’s social justice activism: Older people are seen as the champions of outdated paternalistic and bigoted notions. ( “OK boomer!”)

Have the Baby Boomers ruined the US economy (and the world) for the Millenials? That’s what Bruce Gibney asserts in his book A Generation of Sociopaths: How the Baby Boomers Betrayed America. Gibney lays blame on the Boomers that have;
1) controlled Congress for decades for the huge increase in the debt-to-GDP ratio,
2) under-investment in infrastructure, and
3) inaction on climate change. He claims that it all stems from their lack of investment in the future.

UK academic Dr Beverley Searle agrees somewhat, stating that the blame sits with politicians’ funding decisions which makes the welfare state unsustainable, but deflects the notion of blaming Boomers for the benefits they enjoyed.

I think the notion of generational wars is a perpetual myth (or perhaps a perpetual truth). Every generation has certain influences which drive their attitudes (political & social) and thus the policies enacted by their leaders. It’s very easy to point cross-generational fingers of blame, but very hard to sit in the other-generational seat and play judge.

It’s tougher to get employers to dump the age-related prejudices, however, than the race and gender ones. For one thing, “too old” is harder to define than black or white, male or female, cis- or transgender.

Further, I think Gibney is using the Boomers and Millennials labels as proxies for conservatives and progressives. The policy approaches of Boomers that he condemns are conservative policies, and he is a progressive. He might be better off calling a spade a spade rather than masking a political argument as an #intergenerational one.

The Pew Research Center’s March report “The Generation Gap in American Politics” makes for interesting reading. While it shows younger people being more progressive, it doesn’t explore whether there are generational drivers and what they might be.

Consider This: In your family, are the older generations more politically conservative than the younger ones? To what extent are their differences driven by generational influences rather than politics?

Original articles:
https://www.bloomberg.com/opinion/articles/2020-01-24/age-discrimination-makes-no-economic-sense, https://www.vox.com/2017/12/20/16772670/baby-boomers-millennials-congress-debt, Gibney’s book https://www.hachettebookgroup.com/titles/bruce-cannon-gibney/a-generation-of-sociopaths/9780316395809/, https://www.scotsman.com/news/attacks-on-greedy-baby-boomers-are-unjustified-says-academic-1-4686858, Pew Report http://www.people-press.org/2018/03/01/the-generation-gap-in-american-politics/

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties to a win-win-win result. Family Business Advisors-Counseling Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship #generationwars #generationofsociopaths

Andrew Carnegie is credited with the most infamous and requoted aphorism in family business. “Three generations from shirtsleeves to shirtsleeves” refers to the commonly held belief that in the lifecycle of family business empires, the third generation is where it all goes wrong.

Increasing life expectancies have meant that for the first time in history, four generations are alive at the same time. This has important implications for the timing of the transition of family wealth.

There is an ‘inheritance boom’ coming when the Millennial generation inherit the wealth of the Baby Boomer generation, but this is expected to peak in 2035 when the average Millennial has already passed the age of 60!

Some wealth originators shudder at the idea of passing over the reins while they are still alive, having seen other children squander their family’s wealth. While there is always a risk that the next generation will blow it, the previous generation can reasonably argue that they don’t want to be around if/when that happens.

But is it reasonable to make the next generation wait that long? Granted, they will likely have many years to enjoy the wealth (and the control of the wealth), but holding back can create resentment and can be considered condescending and patronising.

Consider This: At what age do you think your children should inherit significant family assets? To what extent is that driven by your own experience? Whatever the age, what are you doing to prepare them for that eventuality?
Original articles: https://www.moneywise.co.uk/news/2018-01-02/millennials-set-inheritance-boom-when-they-turn-61 https://www.tharawat-magazine.com/facts/third-generation-failure-family-business/

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties to a win-win-win result. Family Business Advisors-Counseling Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

#newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship #nextgen

I am speaking about “Apples & Trees” An intergenerational family relations presentation, at Dubai 2020 Edition – The Prestel & Partner Family Office Forum Collection.

Would you like to attend? https://www.linkedin.com/events/dubai2020edition-theprestel-partnerfamilyofficefor/

The Palace Downtown Dubai, Downtown Dubai, Dubai, AE
March 3, 2020, 9:00 AM – March 4, 2020, 5:30 PM

According to Australian research, family businesses are ill prepared for succession planning, appointing a new CEO, or even a strategy for the future of the business.

The first consideration is whether anyone in the family even wants to take over the business – plenty of children have no interest. Then, decide if the current owner(s) want to hand it over. Any successful transition needs both of those things at the outset.

It might be better to either sell the business, or allowing a committed employee to take over rather than a disinterested and reluctant heir. If both generations are indeed willing, then significant planning is needed.

Articulating the long-term vision for the business, ensuring that younger family members are part of the process and have time to establish themselves as owner-managers within the business, and being ready to truly step away and allow the next generation autonomy to make changes are all essential. As The Economist magazine poignantly wrote: “Inheritance is a process, not an event”.

Consider This: When did you start thinking about succession in your family business? If it was when your children became adults, is that 20 years too late? Original article: https://www.modoras.com/

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties to a win-win-win result. Family Business Advisors-Counseling Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

#newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship

How to deal with family members by marriage poses significant challenges to wealthy families. Should they be allowed to work in the family business? If so, should there be a ceiling on their authority (stock, voting rights, etc)? Do they have a seat/voice at family meetings? What if the only person in the rising generation with the skills to be involved in the family business is a child-in-law? What to do when a marriage is on the rocks (and the child-in-law has a role)?

There are no clean-cut answers to these questions and not even best practice, because each family is different. It comes down to a few general guiding principles, together with the family’s own culture and beliefs regarding the role of children-in-law (some families have blood line rules that have existed for generations and challenging them is near impossible).

Here are some of my favourite aphorisms:

• You enter a family by birth or marriage, and leave by death or divorce (and divorce is not as final as death).
• If a child-in-law doesn’t have an actual voice at the table, their partner may be their proxy voice.
• Don’t hire whom you can’t fire (applies to any business, and any person)
• What works or doesn’t work in another family is no guide to what will work or not work in your family.

Rather than be reactive, develop and articulate your own family’s guiding principles and then setup governance to ensure they are applied as equally and fairly as possible.

Consider This: Does your family have a culture regarding how in-law children are treated? Have you ever had to fire a family member? How do you deal with pillow talk about family business/wealth? Do you have any (formal or informal) induction process for in-laws?

Original articles: https://www.forbes.com/sites/francoisbotha/2019/11/30/when-families-welcome-new-family-members–cultures-what-to-consider/#766fa5ca3f1e, https://www.jdsupra.com/legalnews/family-matters-can-a-family-business-78318/?, https://www.chroniclelive.co.uk/special-features/look-family-businesses-divorce-17022880, https://www.heraldtribune.com/business/20191028/nepotism-is-keeping-it-all-in-family

For additional in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Familosophy newsletter (formerly Family Matters): https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship

The family office space is constantly evolving. This is driven in part by the investment flavour of the month, global economic/political trends, wealth transition within families, the family follow-me-go-round (families looking at what others are doing), and the general competitive environment amongst FO offerings.

Essentially, a family office is a set of services used by a wealth family to manage its wealth and other associated needs. There are no rules for how a FO can or should operate; it ought to be driven by demand and need. The other important issue is market segmentation: the FO needs of a family with 5B+ of assets are very different to those of a family with 500M, and these differences are qualitative as well as quantitative.

Because the SFO and MFO models have expected structures and associated constraints, new service models are being developed, like the virtual family office. Offerings like this evolve to meet demand, and are needed because so many families are global, because technology can deliver such an offering in a distributed and secure manner, and because no single solution can incorporate the best of everything.

Consider This: Do you have/use a family office? Do you know why? Have you mapped the set of services you need against your set of providers and scored/benchmarked them? Have you considered the changes that your family may face over the next 5-10 years and whether the set of services you have now will meet your ongoing needs over that period?

Original articles:
https://www.forbes.com/sites/francoisbotha/2019/10/11/why-family-office-advisors-are-fast-becoming-extinct-and-how-to-avoid-it/#6547275049cf, http://www.campdenfb.com/article/family-office-principals-unconvinced-next-generation-readiness-succession, https://www.forbes.com/sites/robclarfeld/2019/10/28/what-is-a-family-office-and-do-i-need-one/#34c6e8395da1, https://www.forbes.com/sites/francoisbotha/2019/10/30/family-office-insights-10-trends-that-will-affect-family-offices-in-2020/#5a9ad1123fb8, http://www.campdenfb.com/article/big-shifts-family-office-succession-and-recruitment-2020, http://www.businessworld.in/article/Multi-Family-Office-Over-Single-Family-Office/04-01-2020-181434/, https://www.forbes.com/sites/francoisbotha/2020/01/08/opportunities-abound-within-the-family-office-space/#57a083828693, https://www.fa-mag.com/news/russ-prince–innovations-in-the-family-office-model-53377.html

For additional in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Familosophy newsletter (formerly Family Matters): https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

#newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship

Transitioning a business is a once-in-a-lifetime event, and “entitlement” comes up in almost every family discussion, presentation or lecture I give. It has become almost a dirty word when it comes to family wealth – something to be avoided at all cost. “How can I prevent my children from becoming entitled?” is what most every parent wants to know.

When it comes to family business, transcending the negative impact of entitlement can be achieved by 3 things:

1. instilling leadership qualities in children,
2. establishing good governance and a culture of accountability, and
3. create a sense of custodianship when making decisions about the family business.

Personally, I think there is too much negativity around entitlement. The vast majority of parents will transmit their wealth to their children, so the key challenge is to be realistic and manage children’s expectations (rather than avoid them). Being a little entitled isn’t nearly as bad as having no purpose or meaning, which is another ‘symptom’ of children in wealthy families. More about that another time.

Consider This: Do you consider your children ‘entitled’? If so, to what extent is this a product of how you brought them up? How much entitlement is too much?
Original article: https://www.manilatimes.net/do-children-have-a-birthright-to-their-parents-wealth/526942/

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties to a win-win-win result. Family Business Advisors-Counseling Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

#newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship

In Australia, we would say this year’s match up of two teams who haven’t made a Superbowl for a while is “good for football”, and indeed the entire post-season thus far has been one of the better ones in recent years.

Yes, I enjoyed seeing the Pats bundled out early. Maybe I’m indulging in schadenfreude, and maybe I just think it’s time for some other teams to shine (probably both). I really enjoyed the Titans run, which aside from showing the evenness of the competition, reminded us of the importance of defence in the post-season, and Tannehill has been a great part of their story.

But the theme of this post-season has really been coaching. Teams have prepared for their match ups and brought innovative game plans specifically targeting their opponents weaknesses (perceived or otherwise). The ones that have been able to execute on those game plans have gone deep. The ones that have been able to respond to the opposition game plans have gone deeper still.

And that brings us to this year’s opponents. Traditionally, they say winning in the post-season is about the basics: run the ball and control the clock. On that basis, the 49ers have three outstanding running backs, and a fantastic offensive line for them to run behind. That they ground down the Packers with just 8 passing attempts from a top QB like Garoppolo is amazing. It’s a gutsy game plan, but it worked. And if they needed to win it in the air, they probably could have.

But will controlling the clock be enough to beat the Chiefs? They have the temperament to come from behind, and the ability to score so quickly that the game can flip in just a few minutes. Andy Reid, with a poor 10-9 postseason record (do the maths – you need at least 3 wins to make a Superbowl) is hungry. He now has the pieces: Mahomes is sublime and his mobility can compensate for the 49ers’ very aggressive pass rush, Hill has speed and more, and Kelce is a beast who creates mismatches everywhere. The defence isn’t good enough to win games on its own, but does its fair share. But to ensure I’m not being driven by confirmation bias, here’s another way to look at the game:

Key things that the result will hang on:

• The 49ers pass rush can get to Mahomes
• Sherman and the 49er secondary
• The dominance of either Kecle or Kittle
• A crazy coaching game plan
• Turnovers (always extra important in the post-season)

On balance, I still think the Chiefs should win it on the back of playoff experience. Betting wise, they are 1.5 point favourites, which is as good as evens. I don’t think this game will finish close. Best bet: Total Points Scored over 54.5. And if the Chiefs are behind early (quite likely), back them, then lay off later in the game to cover.