Family Business

RS Management Group understands the special demands faced by owners of a family business. The overlap of family, business and ownership can create unique challenges not seen in other companies. We help family and non-family members of a business come together to build a strong business and a healthy business environment, as well as assist ownership transfer and succession.

Transferring your business to anyone, let alone your children, is fraught with the perils of the unknown, the unexpected, the unplanned.  Most owners contemplate and may even take a few faltering steps, but few finish.  Recent surveys confirm that the goal of successful business transfer is seldom reached: two-thirds of all family business owners wish to pass the business to children, less than one in three succeeds.  And, we believe that even those surveys are overly optimistic.  Our guess is about one in ten family businesses are successfully transferred to a child.

Why such an abysmal record?  Why are so many journeys, begun with the best of intentions, doomed to failure?  Many reasons are traditionally given:

  • Estate taxes confiscate up to 40% or more of the business value, an asset both illiquid and difficult to value.  Nevertheless, the IRS requires payment within nine months after date of death.  And, of course, it uses its own method to determine the fair market value of your business – a value certain to exceed your estimates – in order to maximize the take.
  • Children lack the ability and often the commitment to run the business.
  • Owners feel unable to leave the business until they are guaranteed financial independence.
  • Family-based issues prevent agreement on the successor owner.

All of these reasons are partially to blame for the dismal failure of business owners to transfer businesses successfully to their children.  All are valid yet they mask the core issue.  Taxes, unprepared and uncooperative children, and the need for financial security are real, but seldom insurmountable obstacles.

The real reason why business owners fail to transfer their businesses to their children is that they do not know what to do and don’t know how to do it!

We can help!  Contact us today to schedule a confidential, free consultation. 


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