A company is supposed to be a ‘going concern’. So is the family

WHEN your accountant manages your books, they make a quiet assumption: that your business is a “going concern”, that it will operate indefinitely into the future.

Most founders build their entire working life on the same assumption: that the business will outlast them and provide for the people they love.

After years of sitting across the table from owners preparing to sell their companies, I have come to believe that most of them are really trying to recover the time they lost with important people along the way.

Timeless tales

Owners usually tell me one of two stories.

In the first, the business performs with year-on-year growth, strong profits and stability. But the plot at home is lost.

The years away have ended the marriage, and by the time the owner is ready to sell and be present, the children have grown into their own lives and the relationship may not be easily recovered. The company survived, but their personal relationships did not.

The second story is just as common.

A founder starts a business to win back time for the people they love. They then find they cannot balance work, money, family and the venture all at once. The dream of building something for the family becomes the very thing that strains it. The business struggles, and they are pulled back into wage employment.

It cuts both ways. Being a founder, I feel this keenly every day. Entrepreneurship, marriage and parenthood all demand sacrifices. On some days, the trade-off works out. On others, I wonder whether my accomplishments are worth losing time with my son.

I felt this sense of loss as a child. My father tried selling encyclopaedias before the Internet made them obsolete. I remember the house flooded with volumes that he could not sell.

I wondered then if that was what entrepreneurship looked like. Our home carried the weight of my father’s failing business.

When a business unravels, it does not stay in the office. It comes home.

As business owners, we sometimes read “going concern” too narrowly. We take it to mean a business that can continue billing its customers for the next month.

But a real “going concern” is whether the business can survive at all, without everything hanging on one founder’s health, judgment, relationships and sheer force of will.

A simple way to test this exists.

If you stepped away tomorrow, would customers still trust the company? Would your staff still know what to do? Would the cash still come in?

And the question that founders often forget to ask: Would the family still have peace?

A business that passes the first three questions and fails the last is not as healthy as its accounts suggest.

The gap between how long founders expect their businesses to last and how little they prepare for succession is striking.

A recent study by financial services company Sun Life found that only 52 per cent of family businesses in Singapore have a fully developed succession plan, meaning half are building towards a future they have not adequately planned for.

Part of the reason lies in the way we think about legacy. Many owners hope to hand over the company to their children.

I am no exception; I named my company after my son Eden, and I want to pass it on to him one day.

But I am conscious of the possibility that he may not want a life advising on mergers and acquisitions (M&A) in the corporate services sector.

It is much like Singapore’s hawker culture: The next generation honours the food sold and the sacrifice behind managing the stalls, but the hours, heat, thin margins and rising rent do not appeal to them.

The Sun Life study found that about 45 per cent of the next generation are reluctant to take over their family enterprise. Most who are not involved in the business prefer to pursue their own careers or are simply uninterested.

The majority of owners I meet are disappointed when their children decline to take over. Some look for buyers; others wind the business down.

The mark of true legacy

As for my son, I came to the conclusion that what I most want to pass on is not the company but its spirit: the relationships, the trust and the sense of stewardship.

These matter more than any business, and so is leaving him free to become whoever he is meant to be. I named my company after my son to lift him up, not tie him down.

The business is not always the legacy, the transfer of trust is. Sometimes, the responsible choice is not to hand the company to your children, but instead prepare it so that the business’ clients, staff and family can continue trusting and thriving under the next steward.

The right successor is someone who understands that a business cannot be fully measured by money. The best stewards honour what came before, while ushering in the new.

It is a delicate balance. Change too little, and the business may not survive the next chapter; change too much, and you kill the trust that made the business worth buying.

Letting go does not mean losing what you built.

The best handovers grow the business in ways its founder alone never could. Staff gain opportunities that a smaller company cannot offer, and clients are better served when it is part of something larger.

The founder steps back in peace, and the decades of relationships continued to be nurtured rather than dismantled.

That happens when an owner chooses the right buyer, commits to a real handover, and keeps key people and clients close through the transition. In the end, it is about safeguarding the trust you built and passing it on intact.

This Father’s Day, I am not writing as someone who has it all worked out. My company’s name reminds me of who I am working for. But I still catch myself making trade-offs that I quietly tell myself are for him.

The question I keep returning to is one that, I think, every business owner faces eventually: Am I building this for my family, or using them as the reason for choices they never asked me to make?

It is fine to build for ourselves. It is fine to build for our family. The damage comes when we blur the two, noticing only years later that the people we made sacrifices for feel so far away.

An enduring legacy is not measured by whether our children take over. It is measured by whether what we built can carry on without breaking the people we love.

The writer is the founder of Edenity, an M&A advisory firm for small and medium-sized enterprises