The latest news in the riveting world of Life Insurance is Manulife’s pending price increase. The rest of the industry s expected to follow suit. Those interested in buying life and health insurance can get an explanation in the video below:

click here: The Time is Right

We just had renowned author Tom Deans here at 20 Bay to talk about his book “Every Family’s Business: 12 questions ” yesterday . Here at NWF we talk to hundreds of business owners every week, and I can confirm that some of the people who control the family business have no inclination to have a serious conversation about whether to transition the business or not, let alone about how this would be done. The dangers of not talking about business transition are clear: a sharp drop in the value of the controlling owner’s shares of the business after the shares are exchanged.

Tom’s talk made a couple of important points, some of which are:
- “Built to Last” a concept which is also the title of Jim Collin’s business bestseller on companies, can be infuriating to a family business owner because it presupposes that the objective of the family firm is longevity. The iconic family business which is the founders legacy to future generations is a vanity of the founder which may be value destroying to the family and the firm. A firm’s purpose is to produce unique value for consumers resulting in growth in shareholder’s wealth. For the founder to call the family business “my baby” personalizes the firm (which is really just a means to an end) and makes it difficult to make rational decisions about it. Really now, how could anyone be so cruel as to sell their own baby to finance their retirement?
- Of the Top 100 companies in the United States in 1900, only 16 survived to the year 2000. Given the poor odds of survival, what is the value of making longevity a goal?
- Tom’s big insight is that the legacy that a founder wants to leave is NOT the family business. It’s not even the wealth that the sale of the business brings to heirs. Tom’s point is that the most valuable legacy a founder can leave to the family is the tradition of entrepreneurship and the love of commerce, and the freedom to pursue the right opportunities at the right time in history.
- The 12 questions that the family should answer lead to a conversation. It should allow family members to decide whether the future of the business is so valuable to a child or key person that they would be willing to pay for those shares themselves. If nobody in the immediate circle values the business at the price of its shares, the controlling owner then has a mandate to increase firm value and find an outside buyer.
- Tom’s personal story is illuminating for someone who wishes to use the process described in his book for their own family business. Question 3 is for the heir apparent: “Am I willing to buy this business?” Until 2002, Tom’s answer to this question had always been “Yes”. But in 2002, with changes in the market for the products of the family business, Tom said “Not any more”. His father agreed that the business was at the height of it’s value under their management. From that day on, the Dean Father and son became collaborative sellers of the family business. The sale process took 5 years and in 2007 they sold for over a hundred million dollars.

I enjoyed Tom’s speech immensely- he is a great public speaker and his topic is of great value to NWF’s business owner customers. – AH3