Family dynamics add complexity to business transitions
Business Transitions Forum
The owners of Zender Ford in Spruce Grove will, in the coming years, face a query many parents do as their children grow up — can I borrow the car.
But the issue is more complex for the three siblings that make up the company’s ownership group. After all, they’re in the business of selling automobiles.
“So how do we handle that?” asks Codie Richard, the chief financial officer of Zender Auto Group, which owns two dealerships. “Do we buy them each cars, and if so, what kind of vehicles can they drive, and who pays?”
The questions are hardly uncommon among parents of teens. What is unique, however, is Richard and her brothers Shayne and Chad Zender have been discussing them years in advance.
The debate illustrates just how detailed things can be when planning for the next generation’s entry into the family business.
“While we want to operate our business like any other, we have to factor family dynamics into those decisions,” Richard says.
The family has been diligent in professionalizing the 35-year-old business, ensuring transfer of control and ownership has been — and will be — successful.
Richard will be sharing many of these insights at an upcoming conference in Edmonton on May 15 and 16.
Taking place at the Delta Edmonton South, the second annual Edmonton Business Transitions Forum is an opportunity for entrepreneurs, advisers and financiers, with an interest in selling or buying an enterprise, to learn how to manage when a business changes hands.
Among more than 40 other speakers, including entrepreneurs and advisers at the event, Richard will be part of a panel discussion on May 15 focused on professionalizing the family business.
The subject couldn’t be more timely, says Shauna Feth, executive director of the Alberta Business Family Institute at the University of Alberta School of Business.
“In the next five to 10 years, a trillion dollars in wealth will transition from one generation to the next among family enterprises, so there will be an exponential number of businesses needing succession strategies.”
Sitting alongside Richard on the panel, Feth adds that professionalizing “a family business involves a systematic approach to communication and governance.”
Establishing rules of engagement is critical because, unlike other businesses, many big decisions for family enterprises can be tremendously emotional.
Richard says their efforts have paid off so far, allowing for a smooth transition from the first generation to the current one.
Now she and her brothers are focused on how their children will fit into the big picture. And that inevitably includes that discussion about car ownership.
“We’re still hashing that out even though they’re at least four years away,” Richard says. “But like all issues in a family business, what’s important is we start these conversations well ahead of time.”
For more information, and early bird ticket pricing, click here.
This story was created by Content Works, Postmedia’s commercial content division, on behalf of Business Transitions Forum.