March 16, 2017

James Bly Speaks at Family Office Exchange's Multi-Family Office Council Meeting on Improving Generational Planning Utilizing HWSC's Proprietary Research

James Bly

James Bly, Founder & CEO of HWSC was invited to present HWSC's proprietary research on upper middle market family controlled businesses during Family Office Exchange's Multi-Family Office Council meeting on March 16, 2017. The event attendees discussed their client's concerns on how to prepare to manage their businesses through unprecedented change during generational transition.

Mr. Bly first presented HWCS's proprietary research, which combines 7 company specific data factors and 10 industry sub-segment data factors for each of the 5,889 separate businesses which operate in the 12 broad industry segments serviced by HWSC. Such businesses have annual revenues between $100mm to $3B and are collectively worth an estimated $1.6T. These 17 factors help gauge the contextual challenges facing a business owning family as they approach a generational transition. For example, 840, or 14.2%, of the 5,889 of the business are operating in industry sub-segments that are in decline, or there are only 295 of the businesses in industry segments expected to grow during the next 5 years at a rate greater than 5.0%. Another factor indicated by the data is that there are more second generation businesses (2,077) than first generation businesses (1,476), and nearly as many third generation businesses (1,339) as first generation businesses. In the upper middle market, the greatest decline between generations (i.e. 73%) is between third (1,712) and fourth (462) generation of ownership. Also, 1,712, or 29.0%, of the businesses are behind schedule with succession management as their CEOs are older than 67 years old.

Mr. Bly then reviewed HWSC's proprietary Generational Transition Risk Assessment tool that examines 25 specific qualitative factors that are used to score a business and its shareholders' preparedness for a successful generational transition. He, also, helped participants understand how to gauge a business owning family's mindset or orientation to approaching generational transition planning based upon 21 different starting perspectives that are possible. Finally, he offered key insights gained from HWSC's generational transition process approach that has been developed and proven in successful outcomes in over 150 businesses.

 

 

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