Linda Finkle's client sought her professional coaching services because he wanted guidance in developing his own skills as an owner of a successful chain of mini marts and gas stations. His stepson was in line to take over but hadn't shown he was up to the task. The client wanted to know how to react to his 30-something stepson in the business.

"He didn't want to deal with the fact that his stepson may not get it," Finkle says. "He didn't want to think that was a possibility. He wanted to make it work."

Succession planning involves a lot more than simply recording your wishes as to who takes over the company. In fact, in some families, succession often really is more about a transition. Some executives are hesitant to go from one day leading the company to the next day being retired with no involvement or say so in the way their business is run.

"Think of it as transition. Succession signals an end," says Greg McCann, director of Stetson University's Family Business Center in Florida.

He says the underlying challenge to such planning is the emotional resistance by the parties involved. The process is emotionally rigorous, awkward and difficult, but it must be honest and heartfelt, McCann adds.

Jim Stroup, senior consultant at Bosporous Business Consulting and author of "Managing Leadership," agrees. "This is a controversial and often ruinous topic, both for family harmony and for business viability."

J. Del Walker, director of the tax department at Leading Edge firm PKF Texas, says many families delay creating a plan because they expect the process to be difficult. "Most people are not prone to seek out pain," he notes.

The mini mart and gas station owner who worked with Finkle did not want to discuss succession options other than his stepson. So, the two worked on the transition phase, developing concrete ways to encourage the stepson to develop the skills needed to run the business.

They prioritized the skills, both hard such as financial and soft such as leadership that the stepson would need to take over the business. They prioritized and picked the biggest pieces to tackle first, Finkle explains.

In an industry with small profit margins and constantly changing pricing, leadership and financial understanding were essential for success. Instead of telling the stepson that he lacked the necessary leadership skills and financial knowledge, they developed a list of specific things the stepson needed to learn and do to assume greater responsibility within the company.

He took on the challenges, including attending community college classes. Each time he was criticized he would run home to his mom who always took his side.

A year ago, though, the stepson's performance had improved and Finkle's client ended their coaching sessions. Recently, he called again and wanted to talk.

"Something was going to have to happen before he was willing to look at the 'what ifs'," Finkle says. Now, she and her client are again addressing the company's future plans.

Walker says discussing transition and succession planning is essential. "You need to have serious discussions about if the family business is meant to continue and how. It's one thing if it's a family run and owned or if it's a family-owned business not run by the family. Each has a very different approach and objectives."

Most families are not equipped to deal with the process on their own, he notes. He recommends family businesses take a team approach with professionals and experts outside and within the business. Assemble a tax and financial team, an operational team and a communication team—to address all facets of the planning process, Walker says.

He says succession planning typically cannot happen in six to 12 months and recommends a planning horizon of five years. That way the plans can be implemented gradually, allowing time for learning and acceptance.

One of the first step in the planning process is to make sure you have a will that's been updated. On the next level of planning are plans for the estate, tax, ownership and business succession. "Ownership and succession aren't necessarily the same thing," says Eddie Goldsberry, a director at PKF Texas.

"All kids may want an equal share, but it undermines the business," McCann says. Fairness may involve distributing cash to "children" who don't want to be involved in the business, but are concerned about financial equity among the siblings.

Once an estate plan is set and some children receive the business, while children not involved in the business receive other assets, consider that children in the business deserve to share in the future rewards and risks of the business. Constantly changing the estate plan is difficult and unnecessary.

The ultimate level involves determining the business' future leadership. Create shareholder agreements that allow for multiple vantages such as selling shares, departing the company's day-to-day operations, etc. It's at this point that the plan goes into writing, spelling out whether the family intends to keep the business across generations.

Stroup notes that Wang Laboratories opted for a right-of-first-born approach. Today, Wang Laboratories is defunct. The Bronfam business in Canada skips a generation for leadership. "It's a divisive decision resulting in contentious management actions and dissipating the family fortunes," he says.

For large, growing family firms moving onto the next generation, professional management should be considered, Stroup says.

"This is usually most easily done just prior to the handover from one generation to the next in accordance with a pre-designed plan." e