Keeping the books myself
prepared me to take over the family business as its third-generation leader.

Founded in 1936, Kawakita Architectural Design Office is a Yokohama practice that has continued across three generations. I was introduced to Kenji Yanagisawa by my older brother, who was one year ahead of him in their university golf club. We have retained him as our tax adviser since 2015, when my father was president.

At that time, my father ran the company as representative director and my mother kept the books by hand. I was a director without representative authority. Although I was involved in the company’s work, I did not fully understand its cash flows.

Kenji suggested introducing Yayoi Accounting software and having me keep the books myself. The idea was not just to make accounting more efficient, but to understand the company’s numbers firsthand in preparation for taking over the business.

By starting to handle the accounting before becoming representative director, I began to see the daily movements of money that I had not fully understood before. I had more opportunities to think about the company’s finances, and my perspective as a manager changed. I later became a representative director and, after a period in which my father and I both held that position, took over management. It was a gradual succession rather than a single handover. Understanding the company’s numbers through bookkeeping beforehand provided a strong foundation.

From everyday tax matters to business succession and my parents’ estates.

In addition to ongoing tax advice, Kenji has helped us discuss business succession, including the valuation of our company’s shares. The question of how to pass on the company was also connected to how my parents’ assets would be inherited.

When my parents prepared their wills, he worked with a judicial scrivener and personally attended the notary’s office as a witness. I particularly remember how he helped prepare for the succession by speaking directly with both of my parents, rather than focusing only on the company’s figures.

My father subsequently passed away, followed by my mother the next year, and we also asked Kenji to handle the inheritance tax returns. It was reassuring to continue consulting someone who had known the history of both the company and our family for so long.

How do we pass on a company that has come from my grandfather to my father and then to me? Kenji and I discuss both management and share ownership from the perspective of succession within the family.

Founded in 1936, our company will celebrate its centenary in 2036. We discuss how to sustain the business toward that milestone and how to approach succession to a fourth generation beyond it. Those conversations also cover the next generation, including my children’s future.

From my father’s generation to mine, and beyond, we have consulted him on what was needed at each stage: establishing accounting systems, handing over management and dealing with family inheritances. He remains an approachable adviser as we continue the company’s history.

Related article: Five Paths to an Entrepreneur’s Exit: Working Backward from an IPO or M&A
The article also introduces succession through inheritance or lifetime gifts as one option when considering a company’s future.