Tom Deans visits our Centre For Family Business (CFFB)
“To Gift or Not To Gift“, that was the question…at CFFB’s March breakfast.
At our breakfast event, Tom Deans explained why gifting a family business is generally not the best course of action. And Grant Robinson, of event sponsor BDO, provided some opposing thoughts…creating a friendly debate on the topic of family-business transition, succession, and exit.
Tom described himself as a contrarian who tends to challenge people. He has owned and operated a family business. And he explained, he sold it at the right time and at the right price. He planned ahead. He spent the better part of 5 years ‘working his plan’, then he sold his family business. Tom Deans has entrepreneurship in his blood. His great grandfather ran an East Coast tire distribution business. His grandfather was a chemist, who founded what became a $100,000,000 publicly-traded enterprise. Tom’s father created a plastics business, the largest employer in Orangeville.
Tom’s ancestors never, ever ‘gifted’ their businesses…they sold them!
Tom recommended all owners of family businesses consider that option: rather than gift family businesses to relatives, sell the family business. That’s the gist of Tom’s message to the owners of family businesses. In his book, ‘Every Family’s Business‘, Tom provides 12 important questions…designed to help families consider the best course of action for business ‘transition or exit’.
Quoting Tom, “I am offering, in a way, permission for business owners to take care of themselves.”
Tom understands the feelings of guilt family business owners can experience when they think about selling their businesses. He cautions, those feelings are often followed by business failure. The fact is most family businesses do not survive for generations. For a family business to survive for generations, each generation must sacrifice something…just as the founder did before them. Gifting the business to the next generation often results in business failure and loss of the wealth that existed in the business and the family before the gifting.
“This issue is very important in Canada because we have never had so many aging business owners.”
“Banks are doing due diligence on how well prepared family businesses are for transition.”
Summing up Tom Deans’ contrarian view, using his words:
- “A family business is a set of ideas and values that you pass on to your kids.“
- “Pursue the longevity of wealth and family…but not the business itself.“
- “Teach your children to love commerce: to love business…not to love a business.“
Well said Tom! ..and, thank you Grant & BDO for sponsoring this entertaining and educational CFFB event.