You may have started your company with the vision of passing it on to your family members. Perhaps you even inherited the business from a family member yourself.
In any case, passing the business on to future generations is possible, but it can be challenging. Anticipating potential obstacles could help you to prepare for them and even negate the risk of them occurring at all. Outlined below are some potential obstacles you could face.
As with all business transactions, it’s important to set emotions to one side in succession planning. For instance, is one family member going to be jealous if another family member inherits a more powerful role in the company? Are your family members going to be able to work together on a daily business without confrontation?
It’s important to start your succession planning as early as possible so that your family members can be provided with the requisite training. A failure to provide the necessary training could result in family members being ill-prepared and feeling overwhelmed.
Overcoming these challenges
The most effective way to overcome the obstacles mentioned above is to have a written succession plan in place. This may include provisions in your will, trusts and buy-sell agreements. By having your succession plan in writing, your wishes will be clear and some of the emotional burdens can be lifted from family members, making for an easier transition.
Succession planning should be addressed at the earliest opportunity. As you take steps to secure the future of your business, be sure to have legal guidance behind you.