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Entrepreneurial Pathways

By Peninah Kanyua-Muguku

Objectives
• At the end of class, you should be able to:
• Explain the following entrepreneurial pathways
• Buying an existing business
• Franchising
• Family business
• Corporate entrepreneurship
• Social Entrepreneurship

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Buying an “on going concern”

• Buying an existing business is another way to get into business.

• Entrepreneurs in search of a possible venture to buy need to examine the available
opportunities through various sources: Brokers who sell businesses, advertisements,
professionals such as consultants, accountants, lawyers and bankers that might know of a
business that is for sell.
• Purchasing a business venture is a complex transaction and the advice of professionals
should always be sought.

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Advantages of acquiring an existing business

1. Because the enterprise is already in operation, its successful future operation, all things
being equal, is also likely. A successful business has already demonstrated its ability to
attract customers, control cots and make a profit. Additionally, many of the problems a
newly formed business faces are sidestepped. For example: Where should the company be
located? How should it advertise? What type of plant or merchandise layout will be the
most effective? How much should be reordered every three months? What types of
customers will this business attract? What pricing strategy should the company use?
Questions such as these have already been asked and answered.
2. The time and effort associated with starting a new enterprise are eliminated. An ongoing
enterprise already has assembled the inventory, equipment, personnel and facilities
necessary to run it.
3. It sometimes is possible to buy an ongoing business at a bargain price. The owner may
want to sell quickly because of a retirement decision or illness or cash emergency or other
opportunity.

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Due Diligence questions when buying an

existing business
1. Why is the business being sold?-Check around and gather business-related information. Is
the owner in trouble with the suppliers? Is the lease on the building due for renewal and
the landlord planning to triple the rent?
2. What is the current physical condition of the business? Does the company own the
building? If it does, how much repair work needs to be done? If the building is leased,
does the lease provide for the kinds of repairs that will enhance the successful operation of
the business?
3. What is the condition of the inventory? How much inventory does the current owner show
on the books? Does a physical check show that inventory actually exists? Additionally, is
inventory saleable, or is it out-of-date or badly deteriorated?
4. What is the state of the company’s other assets? Is equipment working or is it obsolete and
needs replacing?
5. How many of the employees will remain? Key employees are part of the value of the
business

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Due Diligence questions when buying an

existing business
6. What type of competition does the business face?
7. What does the company’s financial picture look like? It may be necessary for a
prospective buyer to hire an accountant to look over the company’s books. It is
important to get an idea of how well the business is doing financially

Negotiating when buying an existing business

• The potential buyer must negotiate the final deal. This negotiation process, however,
involves a number of factors. Four critical elements should be recognized:
1. Information-performance of business, state of industry (competition and market).
2. Time-having more time than the other party can be very beneficial
3. Pressure – Reason to sell.
4. Alternatives – If there is a similar business for sale, you can use that to negotiate.

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Franchising

• In franchising, semi-independent business owners (franchisees) pay fees and royalties to a

parent company (franchisor) in return for the right (license) to become identified with its
trademark, to sell its products or services, and often to use its business format and system.
Franchisees do not establish their own autonomous businesses; instead, they buy a “success
package” from the franchisor, who shows them how to use it.

• Which are some popular Franchise brands in Kenya?

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Benefits of buying a Franchise

• A Business System. One of the biggest benefits of buying a franchise is gaining access to a
business system that has a proven record of success. In many cases, the business system
that a franchisor provides allows franchisees to get their businesses up and running faster
than if they had tried to launch them on their own.
• Using the franchisor’s business system as a guide, franchisees can be successful even
though they may have little or no experience in the industry.
• Management Training and Support. Franchisors want to give their franchisees a greater
chance for success than independent businesses and offer management training programs
to franchisees prior to opening a new outlet. Training programs often involve both
classroom and on-site instruction to teach franchisees the basic operations of the business.
o ensure franchisees’ continued success; many franchisors supplement their start-up
training programs with ongoing instruction and support.
• Site Selection and Territorial Protection . Some franchisors offer franchisees territorial
protection, which gives existing franchisees the right to exclusive distribution of brand-
name goods or services within a particular geographic area.

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Benefits of buying a Franchise

• Brand-Name Appeal A franchisee purchases the right to use a nationally known and
advertised brand name for a product or service. Thus, the franchisee has the advantage of
identifying his business with a widely recognized trademark, which provides a great deal of
drawing power, particularly for franchisees of established systems. Customers recognize the
identifying trademark, the standard symbols, the store design, and the products of an
established franchise.
• Standardized Quality of Goods and Services
• National Advertising Programs and Marketing Assistance- n effective advertising
program is essential to the success of every franchise operation. Marketing a brand-name
product or service across a wide geographic area requires a far-reaching advertising
campaign.
• Centralized Buying Power A significant advantage a franchisee has over an independent
small business owner is participation in the franchisor’s centralized, volume buying power
and supplier agreements.

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Drawbacks of buying a Franchise

• Franchise Fees and Ongoing Royalties -Virtually every franchisor imposes some type of
fees and demands a share of franchisees’ sales revenue in return for the use of the
franchisor’s name, products or services, and business system. The fees and the initial capital
requirements vary among the different franchisors. Start-up costs for franchises often
include a variety of fees. Most franchises impose an initial franchise fee for the right to use
the company name. Franchisors also impose continuing royalty fees as revenue-sharing
devices. The royalty usually involves a percentage of gross sales with a required minimum,
or a flat fee levied on the franchise.
• Strict Adherence to Standardized Operations- Although franchisees own their
businesses, they do not have the autonomy that independent owners have. To protect its
image, a franchisor requires that franchisees maintain certain operating standards. In fact,
conformity is standard operating procedure in franchising. The franchisor controls the
layout and the color schemes that its franchisees use in their stores, the products they sell,
the personnel and operating policies they use, and many other aspects of running the
business

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Drawbacks of buying a Franchise

• Restrictions on Purchasing and Prices In the interest of maintaining quality standards,
franchisors may require franchisees to purchase products, special equipment, or other
items from the franchisor or from a list of “approved” suppliers. For example, KFC requires
that franchisees use only seasonings blended by a particular company because a poor image
could result from franchisees using inferior products to cut costs.
• Limited Product Line In most cases, the franchise agreement stipulates that the
franchisee can sell only those products approved by the franchisor. Unless they are willing
to risk the cancellation of their licenses, franchisees must avoid selling any unapproved
products through the franchise. A franchise may be required to carry an unpopular product
or be prevented from introducing a desirable one by the franchise agreement.
• Contract Terms and Renewal Because franchise contracts are written by the franchisor’s
attorneys, they always are written in favor of the franchisor. Some franchisors are willing to
negotiate the terms of their contracts, but many of the well-established franchisors are not
because they know they don’t have to.
• Unsatisfactory Training Programs
• Market saturation

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Franchising and the law

• There are no specific laws in Kenya governing franchise agreements. Franchise agreements
are generally regulated by the Law of Contract Act and English common law principles
relating to contract law.
• Kenyan courts generally observe choice of law and forum clauses in contract. The governing
law is chosen by the parties.
• Kenyan courts will only disregard the application of a rule of foreign law where its
application would be contrary to public policy.
• Aspects of the franchise agreements are also regulated by the Trademark Act, with regard to
the protection of trademarks and patents of the franchisor, the Competition Act, the
Consumer Protection Act, and the Income Tax Act, among others.

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Corporate entrepreneurship and Social

Entrepreneurship

By Peninah Kanyua-Muguku

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Course Objectives
• At the end of the course, you should be able to:
✓ Examine the nature of corporate entrepreneurship.
✓ Discuss factors contribution to and limiting corporate entrepreneurship
✓ Describe how a corporation can embrace innovation and Entrepreneurship
✓ Define and describe Social Entrepreneurship

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Corporate Entrepreneurship

What are some corporates that you can describe as innovative?

Do established African firms innovate? Or is this a phenomenon for “startups”.

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[Link]

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The ‘Embattled Corporation’

• Corporations are facing dramatic changes in the way they do business. Four dimensions
have been recognised through which environmental turbulence has created a need for new
management practices:
[Link] customers
[Link] competitors
[Link] technology
[Link] legal, regulatory and ethical standards

Source: Morris, Kuratko and Covin (2011: 6)

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Customers Technology
To change ways they operate internally
• Fragmented markets and how they compete externally based
• Increasing customer expectations on:
• New information management;
• Higher cost of customisation production and service delivery;
customer management; logistics and
• Sustainable growth means learning new
inventory management; sales force
skills in serving global markets management; and product
development technologies
The Embattled
Corporation
Competitors
• Increased expenditure in product
Legal, Regulatory and Ethical
development Standards
• Difficult to differentiate • Increased accountability, visibility and
• Increased competition transparency to multiple stakeholders
• Increased litigious environment and
• Competitors specialising in narrow, regulatory restrictions
profitable niches Source: Morris, Kuratko and Covin (2011: 6)
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What is Corporate Entrepreneurship?

• Independent entrepreneurship is the process whereby an individual or group of
individuals acting independently, create a new organisation.

• Corporate entrepreneurship is the process whereby an individual or a group of

individuals, in association with an existing organisation, create a new organisation or
instigate renewal or innovation within that organisation.

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Three ways in which corporates practice Entrepreneurship

• Strategic renewal- Organization changes its long-term strategy. Example, Netflix shift from
DVD rental to streaming.
• Innovation- Organization comes up with new products/services or improves on existing
products and services.
• Corporate venturing – Organization acquires innovative “startups”.
The Corporate Entrepreneurship Process

Strategic Corporate
Innovation
Renewal Venturing

Corporate
Entrepreneurship
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Spark Accelerator by Safaricom

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Reengineering Corporate Thinking

Steps that will help innovative employees succeed:
• Management support This is the extent to which the management structure itself
encourages employees to believe that innovation is, in fact, part of the role set for all
organisation members. Some of the specific conditions that reflect management support
include quick adoption of employee ideas, recognition of people who bring ideas forward,
support for small experimental projects and seed money to get projects off the ground.
• Autonomy/work discretion Workers have discretion to the extent that they are able to
make decisions about performing their own work in the way they believe is most effective.
Organisations should allow employees to make decisions about their work process and
should avoid criticising them for making mistakes when innovating.
• Rewards/reinforcement Rewards and reinforcement enhance the motivation of
individuals to engage in innovative behaviour. Organisations must be characterised by
providing rewards contingent on performance, providing challenges, increasing
responsibilities and making the ideas of innovative people known to others in the
organisational hierarchy.

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Reengineering Corporate Thinking

• Steps that will help innovative people to develop an entrepreneurial mindset:
• Time availability The fostering of new and innovative ideas requires that individuals have
time to incubate ideas. Organisations must moderate the workload of people, avoid putting
time constraints on all aspects of a person’s job and allow people to work with others on
long-term problem solving.
• Organizational boundaries These boundaries, real and imagined, prevent people from
looking at problems outside their own jobs. People must be encouraged to look at the
organization from a broad perspective. Organizations should avoid having standard
operating procedures for all major parts of jobs, and should reduce dependence on narrow
job descriptions and rigid performance standards

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Social Entrepreneurship -Awakening the Human conscience

The SDGs

[Link]
tch?v=HW76iOQ7qVQ

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What is social entrepreneurship?

• Peter Drucker defines entrepreneurship in this way; “The entrepreneur always searches for
change, responds to it, and exploits it as an opportunity”.
• The social entrepreneur is different from the entrepreneur in that their motivation is a
social mission. This is either by solving a social issue or initiating social change.
• Social Enterprises can be for profit or not for profit.
• Per the Social Enterprise Coalition, Social Enterprises are“…businesses trading for social and
environmental purposes. Social enterprises are distinctive because their social and/or
environmental purpose is absolutely central to what they do - their profits are reinvested to
sustain and further their mission for positive change.”
• What is not included in the social entrepreneurship tent?
• Social Service provision- Provision of necessary services to individuals and families in
need. Examples. children’s home, welfare services
• Social Activism- shines light on social injustice- Think St. Teresa (Mother Teresa)
• Not all social issues can be solved through a business approach

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Difference between business and social enterprise

• Most social entrepreneurs create hybrid organizations.

• Think Muhammod Yunus (Grameen Bank) Was a combination is social
entrepreneurship and social activism.
• Some social enterprises have a profit generating arm and a social service arm.
• Difference between business and social enterprise
• Social enterprises have a social objective. The primary objective of a social enterprise is
to maintain and improve social conditions in a way that goes beyond financial benefits
created for the organization's founders, managers, employees, or customers. Businesses
have a profit focus and seek to maximize returns for shareholders

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The bottom of the pyramid (BOP)

• Most Tier 4 people live in rural villages, or urban slums and shantytowns, and they usually
do not hold legal title or deed to their assets (e.g., dwellings, farms, businesses)
• They have little or no formal education and are hard to reach via conventional distribution,
credit, and communications. The quality and quantity of products and services available in
Tier 4 is generally low.”
• In the past, the BOP population was not profitable. However, this is changing.
Multinational corporations have modified their products to meet the needs of this product.
Examples, the dollar menu, Bamaba 50, Blueband Kadogo.
• There are still challenges within the BOP that have not been addressed by corporations
or government entities. Issues such as lack of credit, lack of housing, unemployment,
access to basic needs, etc.
• Social entrepreneurs seek to address gaps that are often ignored by the commercial
ventures and are not effectively addressed by government.

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The bottom of the pyramid (BOP)

Source: James Davies, Rodrigo Lluberas and Anthony Shorrocks, Credit Suisse Global Wealth Databook 2023

BOP:
• In developed countries,
about 20 percent of
To learn more adults fall within this
about category. For the
opportunities in majority, membership is
this space, look usually transient
at the UN • In contrast, more than
Sustainable 90 percent of the adult
Development population in India and
Goals Africa falls within this
range. For many
residents of low-income
countries, life
membership of the base
tier is the norm rather
than the exception.

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Four Elements of Social Entrepreneurship

(by Jeffrey A. Robinson, Ph.D.)

Four aspects that can help in determining if your venture is “social entrepreneurship”
1. Social impact-
• what social impact does your organization want to make on society?
• At what level does your organization want to make an impact and to what degree?
2. Social innovation
• What new (or improved) approach will your venture use in addressing the
social/environmental issue?
• An understanding of limitation of existing approaches and barriers to social change can
aid in crafting a better approach

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Four Elements of Social Entrepreneurship

3. Sustainability
• Financial viability sets apart SE ventures from traditional approaches to social issues
• Consider how your venture is positioned to fulfill its mission in the long-term.
• Consider fee-for-service or earned-income models that allow for sustainability
4. Measurement
• Ability to measure and document social impact is a key measure of se venture success
• Set up indicators that can signal you to change approach
• Use appropriate measurement tools

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Social Entrepreneurs as Agents of Change

1. Adopting a mission to create and sustain social value. Social impact trumps profit
focus. The Social entrepreneur looks for ways to create lasting social impact.
2. Recognizing and relentlessly pursing new opportunities to serve that mission. Where
others see problems, the entrepreneur see opportunity. The SE focuses on his/her
vision in order to achieve their goals.
3. Engaging in a process of continuous innovation, adaptation and learning. SE look for
innovative ways to ensure that their ventures create social value and obtain needed
resources.
4. Acting boldly without being limited to resources currently in hand. They figure out
how to do more with less and how to attract resources from others.
5. Exhibiting a heightened sense of accountability to the constituencies served and for
the outcomes created.

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Activity

10 Min Social Entrepreneurs: Pioneering Social Change

[Link]

• Kipato Unbranded
• [Link]
• Bidhaa Sasa
• [Link]
• Deevabits Green Energy
• [Link]
• Sanergy
• [Link]

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Family Business

By Peninah Kanyua-Muguku

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Family Business

Family Business

Emotional Facts Profits

Inward Outward
Little change
Fast change

This is where it gets interesting!

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Family Business: Working Definition

• A family business is a synthesis of:
• Ownership control by members of a family or consortium of families
• Strategic influence of a family in the management of the firm
• Concern for family relationships
• The dream (possibility) of continuity across generations
• Families are actually the dominant business form worldwide. They play a leading role in the
social and economic wealth creation of communities and countries. Contrary to
misperceptions, family businesses are not limited to small ‘mum and dad’ operations.
• Some of the world’s biggest and best-known companies are actually family-owned,
including;
• Wal-Mart (USA), L’Oreal (France), Benetton (Italy), Siemens (Germany),
• Ikea (Sweden), Lego (Denmark), Samsung Group (Korea),
• Tata Group (India), Foxconn (Taiwan) and Kikkoman (Japan).

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Family Businesses in Kenya

• Constitute 80–95% of businesses in Kenya
• They are the backbone of the economy. 60-80% of the GDP and labour force.
[Link]

• 67% die or change ownership after first generation

• Only 12% survive under current ownership past the third generation

• Research shows that many entrepreneurs have self-employed parents who act as intimate
role models influencing their children’s likelihood of pursuing an entrepreneurial career.
• Those raised in the family business, have been closely exposed to the challenges and
opportunities related to an entrepreneurial career.

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Examples of Family Businesses in Kenya

• KENAFRIC INDUSTRIES (1987)

• Kenafric engages in the manufacture of confectionery, footwear and stationery
products.
• Kenafric’s first stab at business, was distributing fast-moving goods like sugar, sanitary
paper and pharmaceuticals.
• The family later bought a furniture business but later sold it. (Slow moving)
• Kenafric had diversified to polyvinyl chloride (PVC) products like shoes, slippers and
gumboots. They were behind the “Dancing Queen” shoe style that was a hit in Kenya.
• Mr Bharat Shah just stepped down from being MD to being Vice Chairman to hand
over the matle to the next generation.

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Examples of Family Businesses in Kenya

• Example of Family Businesses in Kenya

• Kenpoly –
• was incorporated in August 1977 as Kenpoly Manufacturers Ltd. Plastic products from
the firm are sold not only in Kenya but also in at least 10 other countries in the region.
• Kenpoly also owns successful farming businesses in Naivasha and Nakuru that employ
1,800 people
• Kenpoly is also the founder of Fina Bank. But in 2012, it sold a 70 per cent stake
• Kenpoly is also Thermopak Kenya Limited that specialises in producing packaging for
use in the horticulture, hospitality and dairy industries.
• Other well known family businesses in Kenya
• Ramco Group ( Patel family)
• Bidco Group (Shah family)
• ICEA Lion ( Ndegwa Family)

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The 3-Circles Model

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Advantages of a Family Business

• Long-term orientation Greater independence of action
• Less (or no) pressure from stock market Less (or no) takeover risk
• Family culture as a source of pride Stability
• Strong identification/commitment/motivation Continuity in leadership
• Greater resilience in hard times Willing to plough back profits
• Less bureaucratic and impersonal Greater flexibility
• Quicker decision-making Financial benefits
• Possibility of great success Knowing the business
• Early training for family members

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Disadvantages of a Family Business

• Less access to capital markets may curtail growth Confusing org. structure
• Challenges securing external financing No clear division of tasks
• Tolerance of inept family members as managers Nepotism
• Inequitable reward systems Spoiled-kid syndrome
• Greater difficulties in attracting professional management Resistance to change
• Family disputes overflow into business Secrecy
• Paternalistic/autocratic rule
• Attraction of dependent personalities
• Family members milking the business
• Disequilibrium between contribution and compensation
• Succession dramas

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SUCCESSION AS A PATHWAY TO ENTREPRENEURSHIP

• Management succession, which involves the transition of managerial decision making in a

business, is one of the greatest challenges confronting owners and entrepreneurs in family
businesses
• One of the major problems is the owner. To a large degree, the owner is the business.
The individual’s personality and talents make the operation what it is. If this person
were to be removed from the picture the company might be unable to continue.
Additionally, this individual may not want to be removed. So if the founder starts to
have health problems or is unable to manage effectively, they may still hang on – even
to the detriment of the business. The owner often views any family attempt to get them
to step aside as greedy efforts to plunder the operation for personal gain. What’s more,
the owner and family members may feel anxiety over death, since raising the topic of
death conjures up a negative image in everyone’s mind.
• Other barriers to succession include sibling rivalry, family members’ fear of losing status, or
a complete aversion to death for fear of loss or abandonment

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Barriers to Succession Planning in Family Firms

Founder/Owner
Death anxiety
Dilemma of choice
Generational envy
Family
Death as taboo
Fear of sibling rivalry
Change of spouse’s position

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Succession Options

1. Appoint Family The “Do Nothing”

member Option !
• The least logical
6. Do nothing 2. Appoint caretaker • The most costly
manager • The most destructive
Succession
options
• Yet sadly
• By far and away the
5. Sell the business 3. Appoint
professional
most popular
manager
4. Liquidate the
business

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KEY FACTORS IN SUCCESSION

• A number of considerations affect the succession issue.
1. Pressures and interests inside the business and outside the business.
2. Forcing events.
3. Sources of succession.
• Pressures and interests inside the business and outside the business.
• Two types of succession pressures originate within the family firm. One comes from
the family members. The other comes from non-family employees.
• Family members
• Founders may still be nervous about handing their children control and ownership of their
personal and business assets. When members of the family are also employees, a number
of succession-type problems can arise. One is that the family members may want to keep
the business in existence so that they and their families will be able to manage it.
Sometimes this results in the members wanting to get, or increase, control over operations.
Another common development is pressure on the owner-manager to designate an heir. A
third possible development is rivalry among the various branches of the family.

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• Non-family employees
• Non-family employees sometimes bring pressure on the owner-manager in an effort to
protect their personal interests. For example, long-term employees often think the
owner should give them an opportunity to buy a stake in the company, or they believe
they should be given a percentage of the business in the owner’s will. Such hopes and
expectations are often conveyed to the owner and can result in pressure for some form
of succession plan.

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• SUCCESSION PRESSURES AND INTERESTS OUTSIDE THE BUSINESS

• Family members
• Even when family members do not play an active role in the business, they can apply
pressure. Quite often these individuals are interested in ensuring that they inherit part of
the operation and they will put pressure on the owner-manager towards achieving that end.
In some cases they pressure in order to get involved in the business.
• Non-family elements
• Another major source of pressure comes from external environmental factors. One of these
is competitors who continually change strategy and force the owner-manager to adjust to
new market considerations. Other factors include customers, technology and new-product
development.

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Forcing events

Forcing events are those happenings that cause the replacement of the owner-manager:
• Death
• Illness
• Mental or psychological breakdown
• Abrupt departure
• Legal problems
• Severe business decline
• Financial difficulties

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SOURCES OF SUCCESSION
• An entrepreneurial successor is someone who is high in ingenuity, creativity and drive. This
person often provides the critical ideas for new-product development and future ventures.
• The managerial successor is someone who is interested in efficiency, internal control and
the effective use of resources. This individual often provides the stability and day-to-day
direction needed to keep the enterprise going.
• When looking for an inside successor, the entrepreneur usually focuses on a son or
daughter or nephew or niece with the intent of gradually giving the person operational
responsibilities followed by strategic power and ownership. An important factor in the
venture’s success is whether the founder and the heir can get along. The entrepreneur
must be able to turn from being a leader to being a coach, from being a doer to being an
adviser. The heir must respect the founder’s attachment to the venture and be sensitive
to this person’s possessive feelings. At the same time the heir must be able to use their
entrepreneurial flair to initiate necessary changes.
• Sometimes the founder will look for a non-family outsider to be the successor, perhaps only
temporarily. The entrepreneur may not see an immediate successor inside the company and
may decide to hire a professional manager, at least on an interim basis, while waiting for an
heir to mature and take over.

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DEVELOPING A SUCCESSION STRATEGY

• Developing a succession strategy involves several important steps: (1) understanding the
contextual aspects, (2) identifying successor qualities and (3) understanding influencing
forces and carrying out the succession plan.
• Understanding the contextual aspect
• Time- The earlier the entrepreneur begins to plan for a successor, the better the chances
of finding the right person.
• Type of venture -Some entrepreneurs are easy to replace; some cannot be replaced. To a
large degree, this is determined by the type of venture. An entrepreneur who is the
ideas person in a high-tech operation is going to be difficult to replace. The same is true
for an entrepreneur whose personal business contacts throughout the industry are the
key factors for the venture’s success.
• Capabilities of managers- As the industry matures, the demands made on the
entrepreneur may also change and so do the skills required.
• Entrepreneur’s vision Most entrepreneurs have expectations, hopes and desires for their
organisation. A successor, it is hoped, will share this vision.

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DEVELOPING A SUCCESSION STRATEGY

• Identifying successor qualities.
• Some of the most common of these successor qualities are:
• sufficient knowledge of the business or a good position (especially marketing or
finance) from which to acquire this knowledge within an acceptable time
• fundamental honesty and capability
• good health
• energy, alertness and perception
• enthusiasm about the enterprise
• personality compatible with the business
• high degree of perseverance
• stability and maturity
• reasonable amount of aggressiveness
• thoroughness and a proper respect for detail
• problem-solving ability

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DEVELOPING A SUCCESSION STRATEGY

• Writing a succession Strategy

• A written policy can be established using one of the following strategies.
• The owner controls the management continuity strategy entirely. This is very common,
yet legal advice is still needed and recommended.
• The owner consults with selected family members. Here, the legal adviser helps to
establish a liaison between family and owner in constructing the succession
mechanism.
• The owner works with professional advisers. This is an actual board of advisers from
various professional disciplines and industries that works with the owner to establish
the mechanism for succession (sometimes referred to as a ‘quasi-board’).
• The owner works with family involvement. This alternative allows the core family
(blood members and spouses) to actively participate in and influence the decisions
regarding succession.
• A less considered alternative is to sell the business.

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