Interested in learning more about succession planning for your family business? You’ll certainly want a firm who has the expertise and your best interest in mind. Clarence Stewart, CPA at Clements, Purvis and Stewart shares what you need to know about what’s involved in succession planning for your family business. From where to start, to what it is, the planning does not have to be as overwhelming as it may seem. Watch below.
What is your name, title / position at Clements, Purvis & Stewart? And can you tell us a little about your background?
My name is Clarence Stewart. I’m a CPA with Clements, Purvis, and Stewart, for about 48 years now. I was managing partner in Clements, Purvis, and Stewart for approximately 25 years. And about five years ago, or 10 years ago, we started making transitions, and about three or four years ago, I finally relinquished my whole role as managing partner in the firm. And now I’m a team player just like everyone else.
How do you currently work with family businesses?
How I work with family businesses now is really I’m their advisors. I’m more of an independent advisor. We have nothing to sell but our services and our help. And we first advise our clients, and then if they want us to go further, then we help become part of the solution. Either we may call the implementation to the change, or we come alongside as a team player to implement change inside of a business’ organization to further their succession planning.
What is succession planning?
Succession planning is really in essence is changing of leadership. And the part I really wanted to talk about more today is the changing of the patriarch. The person or the entrepreneur who has created their business or has worked on in it for 40 something years. And how do you make that change of leadership when you’re so invested in the business and so passionate about it, but knowing that you are mortal and you’ve got to make that transition. So succession planning is extremely important. You either work on doing it yourself while you’re living, or the cycle of life will take its toll and you’ll end up deceased or disabled and unable to be an influence on who is gonna be the leader or the person after you, in your organization, to lead the whole team.
How does one start the family business succession planning process?
The way to start the process is just really becoming aware, acknowledge that transition must take place. Either the patriarch or the leader of the business has gotta make a decision that I’m gonna be a part of that and make that process happen and take my intellectual knowledge that I’ve had over the years to help groom the right person for the job. And if I pick the right person or the wrong person, then I have the ability to change that during my lifetime and get the right person in the place that they need to be at.
How early should a family business start to think about succession planning?
It’s never too early. I think that you should always be of a mindset of developing leaders. Every person that comes into your organization, you should invest in them.
What can a family business owner do to make the transfer of his or her business successful?
You need to start now, and I think you need to surround yourself with good people.
What is the most common mistake when it comes to succession planning?
Not doing anything is not a solution. Let us or your CPA, I think it’s gotta be someone who knows you and your business and your family. Let us help you or assist you, whatever the right word is. We only want your success. That’s our goal.
What is your advice for family businesses when it comes to succession planning?
As entrepreneurs are surrounded by a lot of good people. I think they need to come see their CPA first, because most other advisors has a product or something to sell and take advantage of. We do get paid for what we do, but I feel like we really earn it. So they need to come to a trusted advisor who doesn’t have anything to gain by anything that client tells them in an intimate situation. They need to know that it’s kept in confidence and that we’re listening to them, that we are there for their best interest, and we’re not gonna push them.
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