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Bussiness Plan

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Harvest Plan is to defines how and when the owners and investors will realize an actual cash return on their investment. There are 4 Reasons for Harvesting: the first one is to maintain managerial control and succession for successful continued operations, the second one is to initiate a “liquidity event” that will generate a significant amount of cash for the investors, the third one is an IPO (initial public offering) has become a reality, and the last one is most realistic opportunity is sale of the business.
Advantages of Family Controlled Firms are: Long-term orientation, Greater independence of action, Family culture as a source of pride, Greater resilience in hard times, Less bureaucratic and impersonal, Financial benefits, and Knowing the business. Disadvantages of Family Controlled Firms include: Less access to capital markets may curtail growth,Confusing organization, Nepotism, Spoiled-kid syndrome, Paternalistic/autocratic rule, Financial strain, and Succession dramas
Management Succession Is the transition of managerial decision making and one of the greatest challenges confronting owners and entrepreneurs in privately held businesses.
Research on private firms shows: Many go out of existence after 10 years; only 3 out of 10 survive into a second generation, Only 16% make it to a third generation, and Their average life expectancy is 24 years, which is also the average tenure for founders of a business.
Key Factors in Succession include 3 keys: Forcing Events, Happenings that cause the replacement of the owner-manager:Death, IllnessMental or psychological breakdown, Abrupt departure,Legal problems, Severe business decline, and Financial difficulties. Pressures and Interests inside the Firm include:Family members andNonfamily employees. Pressures and Interests outside the Firm also include Family members and Nonfamily elements
Sources of Succession

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