Having a family business can be stressful enough, but what happens when the owner wants to sell or retire from the family business?
90% of businesses in Kelowna are family owned and a large part of owners depend on transitioning their business value into retirement income, but don't know how to do it.
That's why New York Times bestselling author Tom Deans wrote his book 'Every Family's Business' on how to protect your wealth.
"We use questions to start conversations inside our families to determine whether or not there is a buyer in our family. If there is, great. We get a third-party evaluation on the business and the next generation starts to risk their capital and starts to buy the business for all the right reasons because they believe they can grow it. If they don’t want to risk their capital, if they don’t want to buy the business then we don’t get emotional - we sell and then we transition our wealth to our next generation."
Deans says most families fear they'll be seen as failures if they sell the business so they cling onto the company in order to pass it along to the next generation, despite them wanting to inherit it or not.
Data shows only 30 percent of family businesses make it to the second generation. Of that, only three percent make it to the third generation.
Dustin Serviss, a partner at Serviss Wealth Management, believes there's more to selling the business than the money transaction.
"It usually starts with open communication which is the bulk of the work that we do - just to get people talking. Even doing the conversation in a more relaxed atmosphere like at a BBQ or by the pool with a beer to not talk about how much money dad has, but get the kids up to speed," says Serviss.
Deans has done approximately 1,000 speeches in over 25 countries and believes the key to keeping the local economy thriving is by educating all members of the family.
“There’s so much suffering in these businesses and people don’t know where to turn for help and selling the family business feels like a public acknowledgment of failure when in fact, what the folks in Kelowna are going to hear when I speak is that it’s the high watermark of success.
“Whether people agree with it or not, it’s thought-provoking and gets people thinking about their largest and most valuable assets, which by the way is not their business - it’s their family.”
Deans will be speaking at the Kelowna Golf and Country Club on Oct. 16 at 7:30 a.m.
For more information visit www.servisswealth.com.