With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/1173482
Family-owned and -run businesses are the backbone of the Canadian economy, and James Pelmore, Partner with Foundation Wealth Partners, points out that 78 percent of them don't have a succession plan. "As a result, a company will face considerable challenges through an unplanned transition to the next generation and perhaps implosion or forced sale when the next generation of the family takes over," he says. The reasons for this are complex—yet under- standable. Often, business leaders say they're too busy or enjoying the role too much to contemplate handing over the reins. Others may appreciate the importance of a succession plan but can't decide which family members should be running the com- pany. And, of course, some entrepreneurs in their 40s or even 50s believe it's far too early to think about succession. The problem is that a thoroughly fleshed-out succession strategy can easily take years to get all the family members to the starting block, says Pelmore. A distinguishing feature of Founda- tion Wealth is that its partners have the Family Enterprise Advisor (FEA) accredi- tation from UBC's Sauder School of Business. This program is acknowl- edged for helping advisors across many professional disciplines deepen their relationships with their family enterprise clients and give them a broadened perspective of the issues, including generational transition. The accreditation assures business families that Foundation Wealth Partners under- stands the steps necessary to create a good suc- cession plan. "It's a detailed process that involves honest conversations with the owners and the next generations, identifying their places in the family, business and ownership groups," Pelmore says. "We educate the family about boundaries and responsibilities, determine where the business is in its life cycle, stage regular meetings between all concerned parties, and analyze the resulting infor- mation and share with the owners, who can then make informed decisions about how their business should transition." These processes, properly undertaken, can be revelatory for clients. "As you can imagine, foster- ing honest communication between family mem- bers often dispels wrong assumptions and goes a long way to ensuring that everyone has a voice and is heard, which is key to creating cohesion and harmony," says Pelmore. Should a business owner require the guidance of more than one type of professional, an FEA can introduce that person due to their affiliation with the broad spectrum of Family Enterprise Advisors. "It's a real strength of the accreditation, especially considering clients often require additional services after a succession plan has been developed," says Pelmore. "Over time, as the transition takes place in the leadership and ownership of the business, the family benefits from the advice of an FEA or team of FEAs." There are currently 320 accredited FEAs in Canada. "This number will grow through the efforts of the Family Enterprise Xchange, which was cre- ated through the amalgamation of the Canadian Association of Family Enterprises and the Institute of Family Enterprise Advisors," says Pelmore. "A wave of entrepreneurs is approaching retirement age, and it's in their best interests to seek an FEA to create and manage the process of transitioning their business when the time comes to step down or when an unplanned event happens." For more information call 778-767-0868 or email vancouver@foundationwealth.ca. ■ How a Family Enterprise Advisor can help ensure a smooth transition from one generation to the next FOR SUCCESSION PLANNING, CALL A SPECIALIST C R E AT E D BY BCBusiness I N PA RT N E RS H I P W IT H FOUNDATION WEALTH