14 WESTERN PALLET
Company Succession and Consolidation MLG
The pallet industry is primarily made up of family-based businesses. This is a strength in terms of the longevity and legacy of the business and industry.
However, new situations arise and a family business leader may unexpectedly become incapacitated or pass away. Or the children may want to do something else for their career.
The business needs to have the ability to remain stable during such unpredictable times. To achieve a lasting business legacy, succession planning is key in a family business. Succession planning can help define:
What their role will be
Where they will work
When they can start
How to plan and set up for future
leadership
Succession planning is also useful for other important topics like taxes, liability, estate planning, and ownership stakes. A recent WPA online Master Learning Group (MLG) session focused on the topic of pallet business succession. Here are some of the insights from that session.
Who will work in the business?
Pallet company owners generally seem receptive to passing down the business to children, grandchildren, and in some cases, key employees. However, there is a sense that future generations might not want to continue in the business.
When will they start?
Some businesses bring in children or grandchildren right out of school. Others require them to work outside of the family business for several years prior to returning. In one case, a family member returned to run the business after the father who ran the company became ill and could not continue.
What will their role be, and where will they work?
One participant explained their company’s approach. “None of our kids would come into this business and a managerial role because of their last name unless they went out and did something for a lot of years that qualified them for a managerial job," he said. "So they would start at the bottom in manufacturing, accounting, HR, or sales or purchasing, whatever the case may be. They would be expected to go in there and learn that job better than anybody in that department knows it. And that would take many years to do.”