Keeping it in the family
What happens to your family business when you are ready to move on to something else or retire?
Business succession planning allows you to prepare for the transition between you and the future owner of your business. With family businesses, succession planning can sometimes be complicated because of the relationships involved. Not everyone is comfortable talking about issues such as aging and financial affairs with family members, and not all potential successors are ready or willing to take on the responsibilities involved.
Succession planning should be done well in advance - five or ten years - of the transition to the next owner. Involve your family in these discussions from the beginning, so that everyone has a say. Be sure that the decisions you make will be good for the business, not just for the people involved.
Assess the qualifications of your potential successors as you would with any group of candidates. Are they up for the challenge? Do they even want to take over? Remember that management and ownership are not the same thing. You may decide, for instance, to transfer management of your business to one person, but have several relatives share ownership, even if they are not involved in the day-to-day business dealings.
Take the time to work with your successor, so that the transition can be as smooth as possible. You can also use professionals to help you put together a successful exit strategy.
Learn more about the resources available to you and other options for succession on our section Succession planning.