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Last Update: Tuesday November 19, 2019

Key Idea: Plan Your Exit

Bonnie Brown Hartley, PhD, is a family business counselor who points out that Judi was taking the right steps to move up and out of her company.    More ...

Key Question:

A: 

Think ahead.  In this case the business was sold to the next generation but the transaction was smooth and the business is growing because Judi educated herself for succession. Most family businesses don't make it through the first succession from founder to the next generation.  Judi has put the plan in place to insure the life of the business.

In this video, we learn directly from one of Judi's advisers, Dr. Bonnie Brown Hartley, that this area, she dubbed The Family Business Bermuda Triangle of Money, Power and Love..

QWhat has Judi done to prepare the business for succession?

A:  She has gone to seminars, talked to others in her situation and read everything she could find about family business planning. She also required her children to work for someone else for at least three years before joining Madison Park Greeting. And, she learned from her father how not to pass a business to the next generation. He would turn things over to one of her brothers, then take the task back.

Q.  How does the introduction of a person like Dr. Bonnie Brown Hartley change the family's  transition dynamics?

A:  Money, Power, and Love.  Each has its own internal dynamics.  Each has a face within a family and within the panooply of possible ways to think, behave, and negotiate. Over her years of practice,  Dr. Bonnie Brown Hartley has seen it all.  She knows the traps.  She knows which questions to ask to handle the flare-ups and to keep people on their path to make the succession as equitable as possible.  Her business, beyond her academic research is called Transition Dynamics which spells it right out for any family business or any exit strategy.  

For more, see Step 8.

Q.  Can I hire someone like Dr. Bonnie Brown Hartley to help you?

A. Of course, but buy her book first. If you like what you read, start a conversation, come to terms, and get the kind of help that can help preserve your family's legacy.

Think about it

What are you doing now to get ready to sell your business?

Clip from: Madison Park Greeting

Seattle, Washington: In this episode of the show you  meet Judi Jacobsen and her family at Madison Park Greetings. She started this business in 1977 with just $200.  Judi bought a vacant building, moved in, and by bringing the building back to life, the entire neighborhood improved.

This company produces greeting cards and sells them to consumers through over 5,000 gift shops. Also, they create private collections for retailers including Nordstrom and Neiman Marcus, and, they distribute the graphic products of other artists including Larkspur and Sara Schneidman.

We first met Judi in 1995 in Washington DC when she was being recognized as the Small Business Person of the Year from the State of Washington.  

Good to her word, Judi put a succession plan in place.  In 1995, son Brian and long-time employee, Glen Biely, took over the leadership of the business. The good news is that the young men are growing a much bigger company and are having plenty of fun. 

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Transition Dynamics, Inc.

Bonnie Brown Hartley, Ph.D., President

101 West Venice Avenue, Suite 22
Venice, FL 34285
941.480.1119

Visit our web site: http://www.transitiondynamicsinc.com

Office: 941.480.1119

Business Classification:
Counseling, Education, Human Services

Year Founded:

Plan Your Exit

HATTIE: All right, here's a sticky question. What about Eric, the minister? The youngest son is a Presbyterian minister. How does--do you evenly divide the stock? Do the kids that work get more stock? How does that happen?

JUDI: Yeah. That's really a hard question, and my goal in 1995 was to address that. I went to these different seminars. I talked with our corporate attorney. I've gotten advice from everyone and I talked to the children, and the way I've done it now is, Mark, being the president, will get the most and Brian next, Laurie next, and then Eric. And then they'll be compensated, the ones that got less, in other ways.

HATTIE: OK. So Eric's OK with that.

JUDI: I think so. He said he was.

HATTIE: You've just heard Judi talk about how she is preparing for succession, preparing to pass her business on to her children.  She goes to seminars.  She reads books.  She talks to other people in her situation.

Now, I want you to meet Bonnie Brown, whose business is to work with some of the millions of family-owned and operated companies in their struggle to live and work together every day.

DR. BONNIE BROWN HARTLEY (Consultant): I work in what I call the family business Bermuda Triangle. That means those issues where families who are in business together can really get stuck. And those, in my experience, are power, money and love. It is probably the most complex business structure that you can imagine because you've got the family that doesn't necessarily have the same needs (and) the same objectives.  You've got the management of the business, and then you've got the ownership of the business.

So, you've got basically three different systems, all of them overlapping. It depends on the family and it depends on the business whether that overlap is a healthy one or not. And right in the middle of that overlap, you've got those issues of power and money and love.

Does money mean love? If a family business owner leaves his or her business to only one of the kids, does that mean that that kid was loved more than the others? If some kids don't choose to go into the business, does that mean they don't love their folks as much as the kids who choose to go into the business? Yes.

HATTIE: Odds are that a family business will not make it through its first succession.

BONNIE: If they don't do any kind of planning, that's right, Hattie.

If they don't do the kind of planning they need -- ( if )  they don't hook up with the kind of resource team that they need... They need a good estate tax attorney. They need a good management person.  They need a good tax accountant who understands both corporate and estate planning tax. They need, in some cases, a good therapist -- `Why?'  -- not because they're crazy,  but because they have a lot of pressures and a lot of issues that maybe they have dragged along with them for a long time.

And succession, because it is so intensive, pulls everything into focus and it all starts to bubble up. And so if you've got a chance to really put a good team of professional-service providers together, if you've got a chance to set up a family council, start doing retreats, start doing management training so that those "children," quote, unquote, who have your intelligence, who have grown up in the business, have a chance to learn the skills that are required to run a business in the  21st century. If you give them that chance, their likelihood of success is just... it just skyrockets.


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