Family Business Succession Plan

grandmother-453131_1280When Should You Start Planning Your Family Business Succession?

By Benjamin P. Michaelson

This really is an easy question. The answer, of course, is right now! learn a lesson from the Mogi family, you may find them more recognizable by their family business’ brand-name, Kikkoman. The soy sauce. That family is going strong, for 19 generations and counting!

Governed for nineteen generations, not by a corporate policy, but by a family philosophy. (http://www.kikkomanusa.com/creed/)

They started over 300 years ago. More importantly, they start the succession plan anew from day 1 of each generation. Not day 1 after college. Not day 1 after a non-family job. Day 1 of life. Have a vision. Have values. Prepare your children from their first day in this world as to your family’s vision, your family’s values. That is what allows for success, either inside or outside of the family business.  While it is a few centuries old now, and the Mogi family has modernized it, below is the original Mogi Family Creed. Perhaps it can help form your children’s children’s children’s success. And, of course, don’t forget to make sure your vision and values are documented in a formal plan, and that corporate structure and estate tax matters are tailored for that vision and values. Consider them the mise en place for preparing the succession plan.

The Original Mogi Family Creed:

  •  Make strong morals your foundation, and focus on money last.
  • Don’t forget your foundation.
  • Strive for harmony in your family.
  • Avoid luxury: a simple life is a virtuous life.
  • Do the job that you were born to do, and only that job.
  • Treat a loss and a big gain the same.
  • Competition can help you get ahead, but do not compete unfairly or to an extreme.
  • Make your main meal boiled rice and barley and one bowl of miso soup.
  • Eat the same food as your servants.
  • Be strict with yourself, but be kind to your servants.
  • Keep your personal expenses low.
  • Use the rest of your money for the good of the community to a level in keeping with your circumstances.
  • Keep track of your finances, and save money for the unexpected.
  • Have a family reunion twice a year. At these reunions, don’t judge your family members based on their income, but rather on their character.

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