Reviewed by Sarah Ell
US$16.93 (through Amazon)
More than half the businesses in New Zealand are substantially or solely family-owned, which means all of them, sooner or later, must face the issue of succession. But transitioning a company into the control of a new generation can cause major problems, both financial and emotional.
Statistics show only 40 per cent of businesses survive into their second generation, and 90 per cent will have failed by the third generation.
Werdiger is an Australian author and founder of a
telecommunications billing software company. His interest in family succession planning is personal, because he has recently worked with his family to manage the transition of his father’s fabric trading business to the next generation.
In this book, he discusses the challenges and opportunities created by multiple generations being involved in the same family business.
As he points out, this is the first time in history that four generations of one family might be alive at the same time, and this leads to differences in attitudes and understanding.
Werdiger looks at the intergenerational issues which might arise, including the old adage that the first generation establishes a business, the second generation builds it, and the third generation sells it or loses it.
He believes this pattern is avoidable, if the people inheriting the enterprise are given the right tools, education, and guidance.
He dedicates a chapter to the fraught issue of raising children with wealth, to understand the value of money, and be financially literate, despite having access to generous resources.
Transition is a reasonably short book, but it covers some important issues which family business-owners and anyone who is able to pass on wealth need to consider.
It comes with a free-downloadable Transition Workbook (on davidwerdiger.com/transition-workbook). The workbook contains practical exercises to help business owners and families work through the issues involved in their own situation.