If you are going to be passing a family business on to the next generation, it’s important to do succession planning. Don’t just leave this up to chance. Take the time to carefully plan how you want to transfer ownership of your business, increasing the odds that things will go smoothly.
One thing that can make this process more complicated is that there could be some complex family dynamics. Keep these in mind when determining how your plan can address them.
Decision-making power
One example of this is when there is a conflict over who gets to make decisions. For instance, in one case, an adult child began working at the company with his father. It is often wise to begin training the next generation well in advance. If they can get a few years of hands-on experience, they’ll be much better equipped to take over the business.
But in this specific instance, the young man felt that he wasn’t actually given the autonomy or ability to make any key decisions. His father was the one who always made the decisions, and it caused conflict and disagreements between the two of them. It eventually led to the son leaving the business entirely.
A similar situation could occur if you are leaving your business to multiple siblings. Are they going to be able to coordinate and work together to make choices? Or are they just going to run into conflicts where they all believe that they should have the same power and decision-making ability?
You can address all of these issues in advance and create a succession plan that will work for your family. Just be sure you know what legal steps to take as you do so.