The Importance of a Family Business Succession Plan

Written by Christopher W. Dumm, The Law Firm of Christopher W. Dumm

Over the holidays I found myself reading the charming history of Marchesi Antonori, an Italian wine company, and the tenth oldest family-run business in the world. For twenty-six generations, the Antonoris have dedicated themselves to crafting some of the finest wine on the planet. In the process, they have navigated an assassination by a jealous Duke, a disastrous flood of the Arno River that accidentally poisoned batches of their goods, and an aggressive buy-out attempt by Allied Lyons (later Allied Domecq), among many other hurdles. Miraculously, the company has survived and, even more impressively, the family still gets along.

The success of the Antonori’s is not by chance or dumb luck but the result of planning. Piero Antonori, the company’s leader through much of the twentieth century, did not blindly pass control to the next in line; on the contrary, he waited until his three daughters developed natural, genuine interest before even considering handing over the reins. A qualified and trusted outside individual served as CEO while his children acquired the skills needed to understand the intricacies of wine-making and even then, they only ascended to leadership roles when their own initiative guided them to do so.

Measured, gradual training of heirs is only one aspect of a working succession plan. Other important elements include the establishment of a family trust that ensures major decisions are made with third-party input and a financial plan that includes provisions (and funds) to buy out any future family member that may not wish to participate. All of these considerations were worked into Marchesi Antonori’s planning and the result speaks for itself.

Such foresight is essential to the continued success of any family business, be it one with a 600-year history and annual net profits of tens of millions of dollars or one started just this past year when the global COVID-19 pandemic finally provided you the time to start your dream enterprise.

Read more here about succession planning here.


The Law Office of Christopher W. Dumm

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