‘I wish I had known’: Advisor makes hay out of bad business exit

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Since 2014, the Family Enterprise Advisor designation has been a key credential among professionals who work with wealthy people and their families. We decided to ask advisors who have earned the designation to tell us what it has brought to their practice and how it has influenced their careers.

In 2015, Anne Evamy sold her 16-year-old marketing business. Among other things, the experience taught her why owners benefit from hiring transition advisors.

“I realized that I had not been aware or made aware of all the options to exit my business,” she says. “Only 66 per cent of business owners are familiar with all their options for exiting their business, and only 17 per cent of businesses have a written transition plan in place.”

Now, having earned a Certified Value Builder credential and an FEA designation, she advises and consults to families and business owners through her advisory firm, Junction Point Inc., based in Calgary. The CVB prepared her to help business owners better understand and communicate the value of their enterprise. The FEA equipped her with a toolbox for addressing the family side of family business.

“I wish I had known what I know now” is her professional mantra. She cites a survey from the Exit Institute in the U.S. which found that three out of four business owners “profoundly regretted” their decision one year after the transition.

“My father had been a successful entrepreneur and architect. When he passed away in 1994 there was a lot of work in regard to the transition out of the partnership and a lot of complexity to the assets,” Evamy says. “I spent a lot of time helping my mom deal with dad’s estate. Much of it was done well, but afterward we wished that we’d had the knowledge and the foresight to seek out a Family Enterprise Advisor for the non-technical needs of our family that were just as important.”

The sale of her marketing business underlined this realization, ultimately leading her into the FEA program. Before she launched her current consulting  business, Evamy worked with two other companies in Calgary: the boutique planning firm Blackwood Family Enterprise Services and Grayhawk Investment Strategies, which offers investment-management services.

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Ultimately, though, “I wanted to combine advising to family enterprises and to business owners to build valuable and consequently sellable businesses,” she says.

What first led you to earn your FEA designation?

When I sold my business, a number of friends said to me, “Given your lived experience, you should look at taking this FEA designation.” I did, and right away I was totally engaged. The program revealed why good communication within a family enterprise is so critical.

What were some of the most useful takeaways?

The Family Enterprise Model is an extremely valuable tool that encourages a family to look broadly at all the assets within their enterprise, such as an operating company, real estate, deferred assets/insurance and investable and philanthropic assets. The model helps to view each asset individually and collectively in terms of the larger picture.

That model and the Three-Circle Model are valuable ways to remove emotion and get clarity around one’s overall assets and the relevance and purpose they each serve.

What would you say is the key message of the program?

It’s the importance of multidisciplinary advising. No one advisor has all the right answers for a family. Building a team of trustworthy and experienced advisors is key. Having a quarterback who keeps the big picture front-and-centre means the specialists can concentrate on what they do best. Analyzing all recommendations and strategies from 30,000 feet reveals gaps and helps determine how to prioritize the necessary processes and actions.

If you’re working in a multidisciplinary context, you’re closing more of the potential gaps that can create problems for a family’s harmony and continuity. The ultimate goal is to get the family where it wants to go and ensure that the recommended strategies make sense for that direction. There’s no right answer other than what decisions the family comes to, and it’s a process that evolves through good communication and facilitation.

Did you make any unexpected discoveries?

What’s saddened me was to realize how unsuccessful transition or succession often is. Statistics reveal that only 30 per cent of families succeed from generation one to two, and 13 per cent to generation three, and 1 per cent or 2 per cent for generation four.

We should commend those families who successfully evolve from generation to generation. Family businesses are the engine of our economy, and it behooves us all to help them be successful. If they don’t succeed, none of us do well.

Administered by Family Enterprise Canada, the FEA (Family Enterprise Advisor) designation is increasingly recognized across the country. It identifies advisors with expertise in family business and significant technical knowledge in a related field. The program, which costs $16,995 plus tax, consists of six modules and a capstone team project. More than 450 professionals have achieved the designation.

Other FEAs profiled in this series

• Chris Reichert, president of Reichert Family Enterprise Advisors Inc. in Winnipeg, who is a family-meeting facilitator specializing in the “soft side” of succession and continuity planning.
• Krista Han, managing partner for New Brunswick with Grant Thornton LLP, who manages a province-wide team of professionals who advise family businesses.
• Barb Schimnowsky, a specialist in executive search in Vancouver who today sets up CEOs for success in family businesses.

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