When the founder or leader of a family business passes, survivors must have proper information if they are to make timely and wise decisions about the business. If they have not been actively involved in the business, there are many things they simply do not know. Further, it is quite likely that the founder or head of the business had information in his head that is nowhere else to be found! On the way home from the cemetery is the wrong time to be working out the details of succession and transfer of control.
In the mid-80s, I worked with Frank Beddor, a very successful entrepreneur. He built a large printing empire by purchasing printing businesses that were marginal, then beefed up their management and sales teams while introducing the most modern equipment. Eventually, he had a collection of more than 25 independent companies.
At my urging, Frank made a “Black Book,” literally a three-ring binder that had a tab for each company. Under each tab was the critical information for that business unit, including:
• Who was in charge
• Key persons under that leader
• The sales and profits for the previous year
• Pertinent information about property holdings and/or leases
• A summary of the rolling five-year plan for that business
• Who to really trust in each business
There were two copies of the Black Book, one in the office of the corporate attorney and one in the hands of Marilyn, Frank’s wife. The Beddor Black Book was updated every 18 months, at which time Frank reviewed the contents with Marilyn and the top leadership.
The contents for such a book might include some or all of the following:
• Location of last will and testament with name of executor
• Names of banks and account numbers, with proper documentation on who has access to them
• Record of properties owned or leased
• Most recent consolidated financial statement for the company
• Key, trusted advisors’ names and pertinent information on how best to use their skills
• Insurance policies
• Stock portfolios information
• Location of safe deposit boxes
• Persons who must be notified
• Succession plan (If you don’t have one, make one!)
• Strategic plan for the business
• Any special instructions for the company
This list is a good beginning. It is in no way exhaustive and needs to be customized for your family so they will be fully prepared, should the unexpected show up on your doorstep.
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