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What Happens When You Leave Your Company Behind?

Succession planning is a need, not a want


For Gordon Wusyk, everything changed in an instant. His father, who was running successful moving and ranching businesses, had a heart attack and passed unexpectedly at 59. In the midst of the shock and grieving, a chilling fact emerged. His father did not have a succession plan in place. What followed was chaos.

“It was very traumatic,” says Wusyk. “Not having a succession plan in place led to animosity among some of the siblings, and to tax and legal complications that could have otherwise easily been solved. It resulted in the sale of both businesses at a discount; and both companies were sold outside of the family. My father’s legacy ended just like that.”

It wasn’t as though Wusyk Sr. was a bad business man. Far from it. He had advisors for tax planning, legal advice and accounting. He was very successful, and the businesses were thriving. There was just one thing he didn’t do and one thing his team of advisors did not mention to him, and that was to sit down and make a clear succession plan.

Wusyk explains, “He was getting silo advice from people that had a specialized field of knowledge, but singular expertise is sometimes limited by the discipline. They primarily saw the enterprise from a business perspective and didn’t focus on the other issues. These advisors, in dealing with my father’s family business, unintentionally and inadvertently created as many problems as they solved. There was no holistic game plan. Not even a serious talk about the continuity of the business. Just assumptions but no discussion. After the passing, there was no idea about who should do what.

“With no succession plan in place, who gets involved that creates havoc is Revenue Canada, the bank and lenders. This creates further havoc for the executor. The family attempts to get involved but CRA wants their tax money, banks want their debts paid and executors want to settle the estate. They are not focused on the family business and the legacy. They are not the best people to have involved if you want the perpetuation of the business.”

With the family and the businesses impacted, Wusyk called the lack of planning “a case of procrastination” and vowed to prevent as many families as possible from suffering the same fate.

“It is one of the primary reasons I started Predictable Futures 35 years ago,” he says. “[Succession planning] is not something people have top of mind. Our clients come to us from clients we work with in family-owned businesses, but quite a lot are referrals from banks, legal firms or wealth managers who realize their clients have an issue they don’t know how to deal with, and the advisor is not prepared or trained in that area at all. People are just unaware because succession involves multifaceted issues, and it requires a multidisciplined approach.

“Good succession planning is a process and not an event. A lot of people think it’s an event, like you take a weekend off and do some succession planning! That is just not possible because there are so many factors involved: legal, technical, and financial, but also relational, communication. Business issues are very definable and measurable, but family issues are emotional. Where they intersect is where inevitable conflict occurs. If a succession plan is delayed, deferred or procrastinated, it affects the employees and executives too. People often start polishing up their resumes, wondering if there is a future for the company.”

Wusyk points out, “Only 10 per cent of family businesses make it to the third generation. What makes all the difference is a process consultant/facilitator to help the family see the big picture and provide an integrated solution that moves the family and business to defined goals in a coordinated way, one that focuses on how people communicate and which people must be included; someone who understand the entire process and can coordinate it.”

“After 35 years, I think I’ve earned the right to comment,” he continues. “Predictable Futures has worked with over 125 business families and has experience with businesses worth half a million to hundreds of millions, including second and third generations. There is not much we haven’t seen. Our passion and concerns are for the plight of business families. We believe that family harmony and a successful business perpetuation are not mutually exclusive goals. It’s worth the effort because more than 85 per cent of privately owned companies are family owned or controlled. Our economic driver is family owned businesses. That’s why what we do is so valuable, and why we love doing it.”

Lynne Fisher, national leader, ExitSMART with MNP, also sees a disproportionately small number of clients leading the conversation about succession planning. Drawing from her experience with MNP, she estimates that only about 30 per cent bring up the subject.

“It’s more likely that the advisor will bring it up,” says Fisher. “The reasons vary. Owners think it will not take long once they’re ready to retire. Many business owners don’t like to think about their next stage, as they love and are energized by their businesses.  Retirement seems boring, less purposeful, and owners think that they won’t have an identity anymore, feeling, ‘if I’m not a business owner, what am I?’”

She lists other common reasons owners avoid the topic.

“They’re afraid of losing control over a business that they’ve worked so hard to build. If they’re considering family transition, they don’t want to cause problems within the family by opening a ‘can of worms.’ Sometimes they’re not sure where to start or what they’ll do after they’ve left their businesses.”

Like Wusyk, Fisher knows the consequences for a lack of succession planning are severe.

“There are both short-term and long-term impacts to the business and to the family of the owner. Some that we’ve seen include:


  • Owners receiving diminished value from their businesses because the goodwill hasn’t been transitioned to employees and managers – i.e. all plans, decision protocols, and systems are known only to the owner.


  • Potentially significant tax burden on sale, due to the legal structure and organization of the business.  Strategies to mitigate this burden take a minimum of two years to implement, and many take more.


  • In the event of sudden loss of the founder, devasting financial and emotional loss to the family, due to the potential devaluation of the business, and the loss of regular income and dividend streams.


  • The loss of key employees who fear an uncertain future, and leave due to the absence of a succession plan.


  • In a family business, conflict and strife due to uncertainty, including “who will inherit the business?” and “is there a place for me?”


Fisher raises a very good point about how succession planning is more than deciding who will take over the company. Timing is also crucial.

“An important consideration for succession planning in Alberta is the economic cycle.  Owners want to be timing their exit for an upcycle when values are up, buyers are abundant and interested, and business is good.  This is one of the reasons that starting early with planning, and being ready when the economy is strong, is so important.  Whether owners are considering selling to a third party, transitioning to family or selling to employees or managers, it will be easier, and they’ll generally get a better return during an upcycle.

“Getting to this point, however, takes time and preparation – an absolute minimum of two years.   Once the upcycle hits, it’s often too late and too busy to begin the appropriate planning.”

Fisher assures business owners that while the conversations they must have about succession planning can be difficult, MNP smooths the way.

“The discomfort is eased by assuring the owner that he/she will always be in control of decisions, and timelines, that we’ll be there from the beginning, and all of the way through implementation. We will work with their other advisors as needed, and we will work with the owner on both the transition of ownership and of leadership.   We address matters of the ownership (who will acquire the shares, and for how much?), the business (ensuring that a healthy, well led business is transitioned at a value that fits with the owner’s objectives), and the family (if and how the family will be involved, and how they will work together, estate planning, etc.).”

Owing a business is never easy and it comes at the cost of many sleepless nights, long hours, debt, blood, sweat and tears. The reward is a legacy that can span generations. Don’t let that legacy slip through your fingers by avoiding what may be the most important conversation of your career. Your succession plan is how you continue to make an impact, long after your time as the leader of your empire has past.