Business succession can be a concerning issue, especially if you believe your adult child is not suited for your company.
Surprisingly, a significant number of business owners are choosing not to include their children in business succession plans.
Common reasons to look elsewhere
There are several compelling reasons business owners might decide against involving their children in the family business. Often, it is because the child has no interest in taking over the reins. Other reasons include:
- Family dynamics. Family relationships can complicate business operations, often leading to conflict over differing company visions.
- Professional management. Some prefer to leave the company in the hands of a professional with the desire and experience to ensure its continued success.
- Personal achievement. Others want to see their children build their own career path, putting in the hard work and dedication that adds meaning to their accomplishments.
These reasons highlight the importance of considering all possibilities when making a business succession plan.
Alternatives to children and family
In the contemporary California business environment, many business owners no longer assume a family member is their only option. They are looking at succession more from a business legacy than a family legacy perspective.
Alternatives that can preserve your business legacy:
- A loyal, long-term employee who understands the business and its culture
- An experienced business professional from outside the company
- Merging with or being acquired by another company
Many business owners are implementing employee stock ownership plans (ESOPs) that allow interested employees to take ownership of the company gradually. An advantage of this option is fostering a sense of investment and commitment among employees, helping you feel more confident about business longevity.
Consider speaking with a legal professional to discover additional alternatives to business succession.