1. Family Business in Canada and the Dalhousie Centre for Family Business and Regional Prosperity
Halifax Estate Planning Council
October 19, 2009
Dr. Robert Blunden, Dalhousie University

2. Importance of Family Business
80% of Businesses in Canada and US are Family Owned and Operated
Family Businesses employ 48% of Workforce and Create almost 50% of GDP
Many successful Entrepreneurial Ventures become Family Businesses

3. But Successful Intergenerational Transfer is Difficult
Only about 30% survive the transition to the second generation
Only 13% survive the transition to the third generation

4. Because of the Complexity
Conflicting Desires about Passing On and Running the Business
Conflict Within the Family
Conflict Between the Family and Business Systems

5. Opportunities $10 trillion to change generational hands by 2020
Succession
34% > 61 years old
40% NO identified successor
28% NO estate plan
48% NO buy-sell
Continuity
49% NO Strategic Plan
67% NO Redemption Plan
60% NO Valuation
66% NO Family Meetings
74% NO Participation Policy
85% NO Outside Board
98% NO Family Business Consultant

6. Family Business Challenges
22% Divorce within five years
33% Fire family within five years
30% Buy out last ten years
28% New CEO within five years

7. Family Business Dynamics
Secretive atmosphere
NO Board of Directors/Advisors
Liquidity
Closely held
Tight span of control
Family businesses think long term
Founder’s Disease
Different pockets,
same pants
Limited fund raising potential
Proud
Tight fisted with money (will pay for expert value)
Do business with family values: mafia/gangs
Children: marriage contracts, wills, blended families

8. Three Circle Model
FAMILY
BUSINESS
OWNERSHIP

9. Interrelationships in Family Business7 6 2 3 5 1 4
Ownership
Business
1. Family owner-managers
2. Family members who work in the company but have no ownership
3. Non-family employees
4. Non-family employees who own stock in the firm
5. External Investors
6. Family members who own stock in the company but do not work in it
7. Family members not involved with the firm

10. Ownership Structures And plans Where do the In the Three
Circle Model
Where do the
consultants fit?
How do they
co-ordinate
their efforts?
Structures
Shareholder Meetings
Board of Directors
Plan
Estate Plan
Plan
Strategic Plan
Plans
Contingency Plan
Continuity Plan
Structure
Family Council
Plan
Family Plan
Structure
Management Development
Team
Plan
Family
Business

11. Dalhousie Centre for Family Business and Regional Prosperity
Official launch in January 2009 to provide:
Outreach and training to Family Businesses, Families in Business and Professionals serving Family Businesses
A Resource Centre for Family Businesses
Teaching programs in member universities
Research support for faculty and students in the region

12. The Centre’s Partners
Universities: Saint Mary’s University, Acadia University and University of New Brunswick
Organizations: CAFE and BFF
Financial: BFF and the Bragg Family

13. The Centre’s Accomplishments
Elaine Sibson appointed Director
Advisory Board established
1st Annual Family Business Dinner with the Bragg Family – September 2008
A number of joint educational outreach events with CAFE
2nd Annual Family Business Dinner with the Ganong Family – October 2009

14. Ongoing Activities Fund Raising: Dalhousie Capital Campaign $7 million
Outreach: Joint program with CAFE and ICD (Institute of Corporate Directors) on Family Business Dynamics and Boards of Directors – October 29, 2009.
Research: Life Stage Fit and Succession Success and Family Business in Difficult Economic Times

15. Canadian Association of Family Enterprise (CAFE)
National, Grass-roots Association
Founded in 1983 to
Promote the Well-being and Understanding of the Family in Business
15 Chapters in Canada, 1 in Halifax

16. CAFE Programs Educational Programs Networking and Social Opportunities
Personal Advisory Groups
Advocacy for Family Business

17. CAFE Benefits for Professionals Serving Families in Business
Improved understanding of the soft family business issues that influence family business decisions
Improved ability to best serve your family business clients and become their most trusted advisor
BUT, not a place for client development

18. Questions? Comments? Thoughts?