Traditional valuation techniques generally ignore one important factor in their calculation—the buyer.

Like all businesses, family businesses need to deal with a diverse range of challenges which typically include reacting to market turmoil, cash flow pressures, retaining the best management talent and driving international growth. Without doubt, though, the most critical challenge involves generational change.

Like many successful entrepreneurs, Paul Spiegelman often refers to his company as his “baby,” and he becomes emotional when he talks about issues relating to succession or the sale of all or part of his company — an opportunity he recently sought out.

While companies may be taking a more strategic view of talent management, they struggle with the uniform execution of succession-related activities.

Succession Planning is a hot topic in the news today. But despite the hype, there appears to be little action about it.

A small staff doesn’t get you off the hook. In fact, it only magnifies the immediate impact of unexpected changes in your team – and the need for thoughtful planning.

Succession planning can get emotional, sometimes you need to let go.

Family businesses are facing more difficulties to survive due to a number of factors that have changed the way businesses operate and the way families conduct business.

Tips for succession-plan procrastinators, A third generation CEO offers advice.

Organizations are not taking succession planning seriously and that is going to be a “big problem” for all of us.

Handing off a business to the next generation is the realization of a dream—or a complete nightmare.

“What happens if I get hit by a bus today?” or “Are my affairs really in order?”

Taking time now to choose a successor and map the transition will give peace of mind to advisors, their families and their clients.

Many acquired businesses have underlying potential which the buyer can’t exploit because the knowledge the business uses to generate revenue is locked up inside the heads of founders or key employees.

Succession planning for family businesses receives a deserved amount of attention, but the focus tends to be on getting the next generation ready to take the reins.  What happens if you pass away or are incapacitated due to illness or injury?  In that case, the actual nuts and bolts of the transition can be even more important.

An important consideration for families who have built up a family business is how best to pass it on to the next generation, either in their lifetime or by a will. Here are ten top tips on how to approach making your will

It's your baby. You built it from the ground up and want to make sure it will be in good hands when you surrender the reins. But magical thinking won't make it happen.You need a well-thought-out succession plan if you want a say in how your business does after you're gone. 

Passing the leadership torch successfully is a tricky issue in any business, but it can be particularly difficult when you’re counting on your own flesh and blood to keep it burning bright

If your family owned business is like most other businesses, you may talk about where you’re going, but there’s very little in writing. A clearly written set of short- and long-term goals can keep everyone headed in the same direction

Poor succession planning means family businesses are risking their future, according to an expert in family business law.

Arguments over succession and assets destroy more than relationships. They can also cause a family business to disintegrate.

When I look at the family owned businesses of which there are many, or the small to medium businesses of which there are many I see a huge void in having a succession plan in place. For some this is a daunting task, but it does not need to be. There are people that can assist you through that process and help you figure out who would be a successor.

"The greatest issue facing family business today is succession," says Thomas Deans. "A record number of owners are approaching retirement and are looking to pass on their businesses to younger generations."

What’s an exit strategy? Unfortunately, different people give that phrase different meanings.

You have worked hard to establish a successful business and your greatest wish is to pass that business on to your children. Achieving a smooth transition to the next generation can be a difficult challenge but here are seven tips to help the process along.

Although employee stock ownership plans have been used in the past primarily as a means to attract and keep talent, the last 15 years have seen more business owners using ESOPs to make a gradual exit.

"We have a succession-planning crisis, which is why all of the major banks are starting to work on this issue," says Deans, who added, "when succession planning goes bad for a family, it goes really bad for the banks." It remains an underdiscussed issue because very few families are willing to talk about private issues. Only if a business's collapse hits the courts is it -- and its lessons -- likely to make their way into the financial pages

Today, corporate boards are more proactive about (and simply better at handling) leadership succession, but they still face a significant challenge in picking the right candidates.

Entrepreneurs sometimes rival sport stars with clichés. As sport stars “take it one game at a time”, entrepreneurs “work on the business rather than in it”, “hire slowly and fire quickly”, and always have an “exit strategy”. Like most over-used sayings, these expressions mean nothing for business owners trying to build ventures.

When should an owner leave a business and under what terms? Knowing how much money is needed out of the business and over what time period the owner has to be able to meet his or her retirement lifestyle goals is a major consideration

Management succession is the most important concern of almost all family business leaders especially when they reach the age of 60 and beyond.

It’s an old saying but one that may be wiser today than ever: “East is east, and west is west; and never the twain shall meet.”

Many businesses don’t implement succession plans, and many don’t survive as a result. A business succession plan outlines how a family-owned business will continue and is essential enough to merit the professional counsel and expertise of accountants, attorneys, bankers, business brokers, investment bankers and insurance experts.

It's one of the worst nightmares a small business can face. What happens to an enterprise if one of the directors or partners suddenly dies, becomes gravely ill or totally and permanently disabled?

More than 80% of 1,400 CFOs surveyed by Robert Half Management Resources said they haven't identified a successor. In the majority of cases, the CFO hasn't created a succession plan because he or she doesn't intend to step down in the foreseeable future, although 7% of respondents said there is no one in the company who is qualified to succeed them.

Gathering with family during the holidays can be trying enough – and that's without your slightly overbearing older sister as your boss. Or your workaholic uncle dissecting sales figures as you take a forkful of pecan pie. For the millions who work with relatives at family-owned firms, little separates the dining and board rooms.

For a business to survive, founders must empower their successors. The founders of many small businesses are their business, so it's not surprising that once they are out of the picture, the business collapses.

Closely held and family run businesses are vital to our economy, our society and integral to the American dream itself. Planning for transitions in ownership and control is necessary to ensure retirement income to the owner; liquidity to the owner’s estate upon death; preservation of the business as a “going concerns”; and estate tax minimization, as relevant.

A state of momentary confusion typically engulfs a loved one when notified that their husband or wife has just been in a serious accident or passed away. The atmosphere is often charged with high emotion. Suddenly the world as the surviving spouse has known it is turned upside down. Soon life-altering decisions will have to be made, especially when a family business is involved.

Some of the world's most famous and successful businesses were started by families, including Wal-Mart, Toyota, Ford and De Beers. What makes a family business prosper? What makes them different, and do they face the same challenges as any other business?

Passing on a family business is often a painful process. But don't be too quick to blame the youngsters.

Thinking strategically about succession planning regardless of the relationship of the buyer and seller and the economy are two important parts to a good business plan. An array of financial, management, personal issues play into decisions.

Understanding your eventual exit, even if it is years off, will allow you to align day to day operations and decision making with these goals. Creating an exit plan should be a part of your business practice, regardless of what stage of growth your company is in or what type of economic environment exists.

Transitioning a business is never easy under the best of circumstances; having a family succession plan is even thornier. After all, you are entrusting your life’s work to people who, years ago, may have 1. Stolen your boyfriend (or favorite party dress or Johnny Mathis album), 2. Crashed the station wagon while carousing after a high school football game, or 3. Been the family egghead who played Etch-A-Sketch at the dinner table and seemed to relate better to the dog.

We talk a lot here at Saving Advice about the things you “should” do. Make a will and keep it updated, keep your financial affairs in order, plan for the succession/sale of any businesses you might own, get life insurance, arrange for your healthcare in the event you’re incapacitated, and generally plan for the future so that you, your loved ones, and your assets are protected in the event something happens to you. These are things we all “should” do. Yet few of us actually do these things. We live in a constant state of denial that bad things can happen to us. We think we have plenty of time to make up that will, to handle our business affairs, or draw up that living will and power of attorney. We figure there’s no way we’re going to die tomorrow so we keep putting the “shoulds” off until “someday.”

Open communication and the ability to separate the different expectations of home and work are the keys to a successful father-child business relationship, experts say.

Every parent faces the day when their children are no longer children. They must make their way in the world as adults. In a family-owned business, preparing children for entering into adult life is different in some ways than for other families.

Children of business owners eventually face a dilemma—to join or not to join the family business. The issue deepens when the family business has been around for a few generations and succession now includes different branches of the family. Family battles, disagreements, and enmity can doom a business—and a family—unless succession is well planned in advance.

A lot has already been said and written about succession planning. Its benefits and limitations, its success quotient on the rise of a practical implementation scenario, or the lack of it thereof, from the organizational focus to the employee perspective, have all been covered in depth. Now, let us divert the line of thinking a bit, and look at it from the eyes of one of the other crucial members—the clients. Why do client organizations insist that their vendors put up a formidable succession planning strategy in place? How does it impact them, and what role do they play in charting out a plan, and thereafter during its adoption and execution stages? Any plan implemented by a company must have a long-term vision. It has to be beneficial for all the parties—external and internal, must be flexible, facilitate movement, etc.

When bringing in a new owner or manager, start by giving them a small responsibility and increasing it incrementally. This approach can help give the successor time to grow into the business while gradually increasing the confidence of the departing chief. It will also give employees a chance to become accustomed to the new boss-in-waiting.Unlike when Roy Leppo retired, his son Dick made an abrupt exit when handing off the business to his own son, Dale. While the quick switch made some things easier for Dale, he and the sales manager disagreed over which products to sell. The manager left and so did the other sales employees. 

Tomio Moriguchi, the 69-year-old chairman and CEO of Uwajimaya specialty supermarkets, will soon need someone else to carry on leadership of his company. The son of Japanese immigrants, Moriguchi is from a culture that traditionally emphasizes family ties. But as Moriguchi considers whether his son, nieces, nephews or someone outside of the Moriguchi family will take over Uwajimaya, business comes first. "I do feel desire as a father to pass it on to my son, but most of my assets are tied up with the company," Moriguchi said. "I want the best qualified person."

Retiring baby boomers passing the baton on to their children as well as young families looking to strengthen their connection help fuel the growth of family-owned businesses, according to Mike Gilbert, a business counselor with the Silicon Valley Service Core of Retired Executives. In my experience, families with kids are asking themselves what they want," says Gilbert, who spent 30 years in various senior-level management roles in the valley. "Small business owners with children can balance career and family a lot easier," says Gilbert. "Business ownership allows them to have a personal relationship with each other that goes beyond an occasional family event."

The best way to prepare for business succession is to imagine both the best and worst that could happen to your company after you're no longer at the helm. Instead of waiting for the "right" moment to develop your succession plan, take a proactive approach and begin planning now so that the investment you've made in your business continues to strengthen and grow.

In business terminology, an ending for a business owner is called an "exit," while the planning of a defined ending is called an "exit strategy." Having an exit strategy tells others who have the occasion to view your business that you're in control of your business, that you're aware and goal focused, and that you have a plan for an organized and profitable ending. Business owners who don't plan for ownership transition are often faced with the inability to receive enough money in an ownership change to fund a comfortable retirement. This doesn't happen because such owners failed to create value in their businesses; rather, it's because they failed to do the planning that would have allowed them to keep that value.

Still, keeping a business in the family isn't all cheers and fast bikes; it can be more like one of those destructive dinner-table discussions we all try to avoid. According to findings by Joseph Astrachan, editor at Family Business Review, more than 30% of all family-owned businesses survive into the second generation while only 12% survive into the third.

When David Schwartz, owner of Harry W. Schwartz Bookshops, died of cancer in June, not only was he remembered for his talent as an independent bookseller, but also praised for his foresight in preserving the company's legacy.

Three years ago, Schwartz crafted a succession plan that included buying out business partners, transferring business responsibilities to others within the company and training future managers, all the while holding to the company's mission.

As an entrepreneur you've put your blood, sweat and tears into building your business. You've worked 60, 70 or even 80 to 90+ hours per week trying to get new clients and retain them so you can increase your revenues. Sooner or later you'll consider selling your business along with all its worries and responsibilities. You'll fantasize about living the rest of your life in an exotic tropical paradise.

But then you wake up and come back to reality.

Selling your business is not as easy as you thought. You begin to realize that selling a business for a price you deem fair and equitable isn't guaranteed. In fact, the shocking statistic from my research highlights that 75% of businesses that go to the market DO NOT sell.

Why?

Because they either don't receive any offers or they don't receive any offers they consider acceptable.

Leaving a family business to, say, your beloved daughter and not to your less-liked sons? If you don't expect that your sons will sue your daughter, or your estate, when you have passed away, think again.

Business owners spend most of their time and energy on building a business and making it run smoothly. Shrewd business owners also work on what happens to the business after they are gone. This often includes creating a succession plan that transfers ownership in a way that minimizes gift, estate or generation-skipping transfer taxes and making sure that operations are put in competent hands.

As a small business owner, you should be both interested and concerned about two prevailing trends coming together in the American workplace: the job growth created by small businesses and the responsibility of individuals for their own retirement planning.

If you are a business owner, with no employees other than co-owners or spouses, then you may wish to consider establishing a one-person 401(k) plan for your business. That's right. As a small business owner, you can now enjoy the same 401(k) retirement plan benefits currently provided to millions of other Americans.