Thomas William Deans is an entrepreneur. In fact, he is the third generation of a family of successful entrepreneurs, and, like his father and his grandfather before him, Deans started, built and then successfully sold his business. Now he wants to share his experience.
So Deans wrote a book.
While a quick scan at the local bookstore will reveal hundreds of books on this topic, Deans believes he has a winning formula with Every Family’s Business (Détente Financial Corporation). He uses a fictional-style story to teach financial advisors how to help family business owners — the type of client with the highest probability of becoming high-net-worth, according to statistics, as well as the type least likely to receive appropriate succession-planning advice — with succession planning.
Deans’s book starts out with William Cartright, a 47-year-old businessman boarding a plane after helping to sell his father’s business for $125 million. As the story unfolds in David Chilton’s Wealthy Barber–style, the reader is introduced to a fairly typical tale of Cartright, a father who built a successful family business, now stuck at the crossroads.
While Cartright wants to ensure that his two children are taken care of, he doesn’t want to spoil them. Add to this his desire to enjoy his own hard work and his need to make sure that the business survives beyond him to future generations, and the book begins to reveal the emotional intricacies an entrepreneur often faces when making succession-planning decisions.
As the tale develops, the reader is given more insight into how family businesses succeed and fail, and how an objective, knowledgeable and proactive advisor can help. For example, Deans offers a glimpse into the tough familial decisions business owners are often faced with when dealing with children.
While many of these entrepreneurs have a sincere desire to provide for their children, they are often oblivious as to whether or not the children are capable of or even interested in taking over the business — the crux of a conversation that is essential according to Deans and told through his alter-ego, Cartright, to another, more mature entrepreneur, John Evason.
Through his alter-ego, Deans reminds readers that business is about making money and that narrowly defining legacy as the longevity of a business — as an end unto itself — can be the largest wealth-destroying factor an entrepreneur might face. For example, if a parent gifts a child with a watch, explains Deans, after that parent passes on, it becomes virtually impossible for that child to sell that watch.
This is because the child has a tremendous emotional attachment to the gift. Now, there might not be a problem with this emotional attachment when talking about a watch, but when the gift becomes a business, then the inability to assess the value and the evolution of that business means that the market could pass the child by. The emotional attachment to the gift takes the sale option off the table for that child.
It’s these emotional blocks (and the inability to honestly face them) that often deteriorate wealth and deny a business owner and his or her family the legacy they desire. Deans’s solution is offered in the form of open, honest communication.
Through 12 questions, Deans provides business owners (and their advisors) an opportunity to learn what they truly want and what they truly need; these questions also offer family members a chance to appreciate the business owner’s dreams, goals and responsibilities. There is a caveat: by skipping ahead and reading only the questions, a reader is denied the context behind these queries — context that is essential in developing honest family communication and realistic succession-planning answers.
Originally published in Advisor’s Edge Report in September 2008