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3 tips for starting the family business succession conversation

On Behalf of | Jun 18, 2024 | Business Planning

Chances are you started preparing your children to take over the business from when they were young. Perhaps, you had them visit often to familiarize themselves with the business and have introduced them to managers and employees. However, when they are old enough, you will need to talk to them about succession planning.

The following are three tips for initiating the discussion:

1. Don’t wait for a crisis to initiate the conversation 

The focus of your conversation should be education – you want to educate your children about the importance of having a succession plan, your goals for the business and so on. Thus, consider starting the conversation early. You don’t have to wait for a crisis, such as a sickness or an injury to hold a meeting. The focus of your talk should not be reacting to an emergency.

2. Talk about your family legacy

It can be beneficial for your children to understand the importance of the family legacy. If you established the business, let them know how you did it, what the company means to you and how you wish it to benefit them. If you inherited the business, let them know its history and how you intend to keep the legacy. 

Doing this can help your kids have deep respect and gratitude for the business. Accordingly, they will strive to grow and pass it on to their kids.

3. Ask if they are willing to take over

You need to know if your children are willing to take over the business. Avoid assuming they want to inherit it or presenting the business as an obligation. Actively ask about their life goals to make informed decisions regarding the business.

Talking to your children about inheriting the business is a vital step in succession planning. You should also seek legal guidance to validate your decisions.