Many business owners would like to see their children take ownership of the family business when they retire or die, but it can sometimes be complicated. Cases of business owners being so concerned about the future of the company that they even delay making vital decisions have been reported.
Here are two common concerns of business succession:
1. Children unwilling to take over
Children raised in a family that owns a business might be unwilling to take over. This may happen because they may have grown up hearing difficult conversations about the business and watching their parents make complex decisions. This may have made them believe running the business is difficult. Hence, when they are old enough to be introduced to the company’s operations, they may be unwilling to participate.
Other reasons include believing they can’t meet the family’s expectations, having other passions or having concerns about work-life balance.
Parents should start teaching their children about money and the family business from an early age. Children should know the benefits and challenges of the company and the available tools for solving challenges.
It’s also important for a child not to feel pressured to take over the family business. If they want to pursue a different career path, parents can consider other options.
2. The business failing
Another common concern that some parents have during succession planning is the business failing. You might have heard of parents returning to the company to make decisions after retiring because they disagree with their successor’s decisions.
Actively preparing your children to run the family business and giving them space to show their expertise can ensure the company grows and is passed down to the next generation.
Creating a business succession plan is an integral part of protecting your legacy. Legal guidance can help you make informed decisions about critical elements.