The motorcoach industry is rich with family businesses. Heres how to keep it that way.

Don Zinyk, a partner with KPMG, the global network of professional firms providing audit, tax and advisory services, says there are seven key factors that must be addressed to successfully pass your transportation business from family elders to the next generation -- with a minimum of heartache.

1. Ask tough questions. With the most important question being: Who's going to take over? 'If you've got more than one sibling working in the business, it's very unlikely you're going to have joint control. At the end of the day, somebody's got to be president, says Zinyk.

In his practice, Zinyk interviews all stakeholders, including key nonfamily employees, then presents a report pointing out areas where there's consensus and divergence. 'I've done plans where after you talk to mom and dad and siblings, there is unanimity on who should lead the next generation, but that's rare'.

'The family should be asking itself what it wants to accomplish, what's best for the business? Too many people go into succession planning motivated by taxes, instead of sitting back and asking what's the best thing we can do to ensure the business survives to the next generation.'

2. Open communication. To help facilitate communication, Zinyk suggests setting up a 'family council' -- a mechanism with simple rules of order. It has to be a forum that allows all family members to speak up without fear of repercussion. Often an outside mediator can help things along for the first year.

'Everyone in the family should take turns chairing the meetings, setting the agenda, etc.,' says Zinyk, "asking fundamental questions such as how much cash the family wants out of the business; family values and how the business is consistent with those values; philanthropy -- anything that impacts the family as a result of the business.'

3. Get your legal house in order. In many transitions, stakeholders will play around with the boxes in the organizational chart and won't bother to change the buy-sell agreement or the will to correspond with the changes.

'This is really a matter of ensuring all your i's are dotted, so if something happens you've got a legal document to fall back on that will stand up in court," says Zinyk.

A succession plan can take three to five years but you can't wait that long to assure the founders will is going to cause what you want to have happen, to happen.

'I look at the key elements: will, buy-sell agreement, and well do a quick and dirty (succession plan). If its not good enough to get us five years down the road, then well change it, knowing well change it again once the process is complete. Its a temporary document to tide us over till things are done, and as you get towards the end and can see what the final picture looks like, then you ensure your final documentation is consistent with your final picture.'

4. Build the successors business skills. This is too often neglected in succession plans. The founder figures the son or daughter comes from the right gene pool, has been trained under them for several years, and is good to go for the take over.

'I encourage clients to look at it this way: If you were to hire professional management to run the business, what sort of skill set would you want? They map out the skills of their dream executive and then take the skill set of the identified successor and identify his skills, and compare them to the dream exec -- then look at the gaps,' says Zinyk.

'Are the gaps something that could be filled by having a strong CFO, or human relations person? Or, are they gaps that require more training or more exposure to different parts of the business? Its basically coming up with a plan to ensure the successor is as well equipped as he or she can possibly be for the day they take over.'

Many of Zinyk's clients insist their kids work outside the family for a while before they're admitted into the business. "It proves to everyone, including the successor, that they can make it for themselves, getting by on their talents and not their name. It does so much for the confidence of the individual, plus it gives them a better perspective on the industry.'

5. Getting nonfamily buy-in. This one isn't key in all situations but if you've got nonfamily employees that are critical to the success of the business, then its crucial that these people are on side if theres to be a change in leadership. Its mostly a matter of finding out their concerns, ensuring theyre looked after financially, and addressing any doubts as to what the change means for them. "If its not handled properly you could lose people you really dont want to lose.'

6. Funding for retirement. Critical to the success of all transition plans is finding a way to get the parents wealth out of the business without forcing the next generation into financial strain. This is a real challenge and unfortunately its where too many start the transition process -- it should be left until the end.

Zinyk says there are numerous ways to accomplish moving mom and dads cash out of the business. Freezes can be arranged that allow ownership to transfer, but the parents still have some control until theyre paid out. Plus, there are private equity groups - banks and private equity pools -- who are happy to help finance succession for a piece of the action. 'They put money up, and take a certain percentage of the profits through a specific class of shares that can be redeemable upon certain benchmarks being hit so the family can get it back.'

7. Define the current leaders future role. If someones been running a business for 30 years, people identify as such.

'But when they know they have to retire, they're scared silly as to who they're going to be once they step down as president of the business,' says Zinyk. 'If its a man, being a typical male, a whole bunch of his identity is wrapped up in his role, and if he doesn't have the role, he doesn't know who he is. What role is he going to fulfill after the transition?

'There are too many situations where dad comes into the office occasionally and talks to the old employees. They start complaining about something Juniors doing and dad jumps to remedy it -- suddenly Juniors in a position where everything is being second guessed. Why does it happen? Because Dad doesnt have a role.'

One successful family set up a board of advisers and made their retired father the chairman. 'It functioned much like a board of directors; the siblings would make quarterly reports and the founder got to ask questions and it worked really well. Another client made dad the director of training where he continued to have a specific role in the business.

'But it's got to be a two-way street. You have to come to a consensus with the outgoing leader as to how much involvement they want.'

Reprinted from Todays Trucking.