In The News
Communication is critical in planning succession in family businesses
The Wichita Business Journal
November 18, 2011
When Greg Hephner graduated from college in 1986, he went to work for his father's home-electronics business. Now, his eldest son has done the same thing, and another son could join the business when he graduates from college as well.
It sets the stage for what likely will be a third generation of family ownership for Hephner TV & Electronics, which Lonnie Hephner opened in 1950 and Greg Hephner took over in the mid-1990s.
The Hephners are working on a succession plan to keep the business in the family using a blueprint formed when Lonnie Hephner groomed Greg over a span of about 10 years.
"It has been a thoroughly planned (transition)," says Lonnie Hephner, who still works in the business part time.
Greg Hephner says that, while transferring ownership to his kids is a ways off, it helps that his son, Michael, is working for the business now to learn its intricacies.
Planning for continued family ownership
Other Wichita-area family businesses are making similar succession plans.
Restaurant group Sasnak Management, for example, is working on a plan to transition its leadership to the next generation. Brothers David and Darrel Rolph started the company.
Hutton Construction Corp., another example, spent five years on its succession plan before finishing it in 2010.
Local estate planners say it's never too early to put a succession plan in place for a family-owned business.
"That's an integral part of an estate plan," says Dan Peare, an estate planner at Hinkle Law LLC. "Every individual needs to be aware of what would happen in the event of a transfer of stock or equity in a company. What's critically important is communicating the goals of all parties involved," Peare says.
Preserving business legacy
Preparing a business for the next generation can be inherently challenging, experts say.
Some businesses prefer to have the help of a third party to take the emotion out of some of the decision making and provide advice on possible "what-if" scenarios.
"It helps to have a third party to ask questions and bring clarity," says Jon Rolph, the president of Sasnak.
David Rolph says having his son interested in leading Sasnak is making the succession process easier.
"We were fortunate to have somebody like Jon available to us and committed to it," David Rolph says.
Sasnak still is in the early phases of its succession plan.
Hephner, meanwhile, says he has given his kids the choice to decide whether they want to work for the family business.
And if they do, he wants to make sure it's something they want to stick with long term.
"Communication is key," Greg Hephner says.
Three generations of Hephners work at Hephner TV, Michael, left, Greg, center, and founder Lonnie.
Photo by Josh Heck, Wichita Business Journal