  Family Business Best
Practices
Family Business Transition
Understanding the “Me” Generation
By Dianne H.B. Welsh, Ph.D., SHRM, and Ted Shalek, CPA,
CVA, MBA
Published: January 2008
What are your expectations and their reality for passing
on the family business? Perceptions are reality, as they
say. That is where the problem lies. Do you know the
realities of those who were born in the 1970s, 1980s and
1990s? This is probably the group to which you will
either be selling your business or to which you will be
passing it along. The Associated Press has called them
“The Entitlement Generation,” while Dr. Jean Twenge
calls them Generation Me (2006). According to responses
from 1.3 million respondents spanning six decades, this
generation is profoundly different than previous
generations. Needing constant praise and fulfillment,
this generation is tolerant, confident, open-minded, and
ambitious, but also depressed, lonely, anxious and
cynical (Twenge, 2006).
Are you preparing your family business to be passed on
to this generation? To be sold to this generation? How
about marketing and selling to this generation?
Appealing to the entrepreneurs? If not, your business
may not succeed. Being prepared to make crucial
decisions that will affect the future of your business
is the key to succession planning. Entrepreneurship is
the key to this generation and successful family
business transitions (Welsh, 2007).
Here are 25 key factors to consider:
1. History of the business: Who founded it? How did you
acquire it? What generation is the business currently
in?
2. What is the culture of the business? The history,
norms, stories, morés that define the business?
3. What is the current composition of the ownership?
4. What is the current family structure? i.e., brothers,
sisters, uncles, aunts, nieces, nephews, grandparents -
as it relates to the current ownership structure?
5. What is the current management structure of the
company? Who actually runs the day-to-day operations?
Family or unrelated employee with particular skills and
talents?
6. What are the financial and non-financial employee and
family reward systems?
7. Who needs to be supported by the business? How many
families?
8. Have the family members that have been brought into
the business been accepted by the non-family management
team?
9. Have the children worked in the business? And if so,
do they have the passion to continue the business? And
do they have the required skills to manage the business?
10. Have you given the next generation the opportunity
to be entrepreneurial?
11. Have there been any major family disagreements about
the business? Management? Finances? Compensation?
Dividends?
12. Who is the heir(s) apparent? Are there any?
13. Does the company have a retirement program?
14. Is the current non-family management team adequately
compensated?
15. Have any of the non-family management team members
been promised future ownership of the business?
16. Have you had the value of the business analyzed?
17. Do your family members “expect” you to give them the
business without payment for the value of the business?
18. Have you done estate planning without considering
future management of the business assets?
19. Who has the financial resources to buy the business?
20. Are you willing to wait for complete payment over a
long period of time? Do you trust the family members
that will buy the business from you? Do they have the
financial and management skills to make the business
perform in a manner that will insure the payment of your
sales price and provide adequate compensation for their
own families during the payback period?
21. Do the family members who will buy the business have
similar ethical, family and business values?
22. Have you considered all of the psychological
considerations of the transition?
23. How old are you?
24. Where do you want to be five or ten years from now?
What will it take for you to fulfill your dreams?
25. HAVE YOU STARTED TO PLAN?
Each family business faces these issues at different
points in the family business lifetime. You must begin
to plan, starting today, for the smooth transition of
your business to the next generation of ownership. Study
these questions and discuss with your family business
members, significant non-family members, and your family
business council or advisors, if you have them.
Understand how each relates to you and your business and
then contact the professionals who can help you
transform your dreams into reality.
Copyright Family Bus First, Int’l, Inc. Cannot be
used without written permission of the authors.
Dr. Dianne Welsh, SHRM, holds the James W. Walter
Distinguished Chair in Entrepreneurship and is the
Founder and Director of the Florida Entrepreneur &
Family Business Center at The University of Tampa. She
is President of Family Business First International,
Inc., an international entrepreneurial consulting family
firm.
Ted Shalek, CPA/CVA, MBA is CFO of Lindell Properties
and formerly owned Shalek & Associates, CPAs, Inc. in
Cleveland, Ohio for thirty years. He is Vice President
of Family Business First International, Inc., and
focuses on the financial aspects of family businesses.
Twenge, J.M. (2006). Generation me. New York, NY: Free
Press.
Campbell, N.D., Heriot, K.H., & Welsh, D.H.B. (2007).
The black box: Unraveling family business succession.
New England Journal of Entrepreneurship, 10(2), 9-14.
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