If you own and run a family business, the day will eventually come when you can no longer do it or you want to retire. You need to put a plan in place for when that time happens unless you want the business to close down when you are no longer running it. The best course of action is to create a business succession plan, which, according to Forbes, allows you to put steps in place to transfer the business to your heirs.
It is a way for you to ensure the continuation of the business for the next generation. You will need to do quite a bit of work unless the heir you wish to take over is already running the business with you. One part of your plan will be to teach your heir the ropes and to ensure he or she knows the business inside and out. This includes not only the daily running of the business but also all the back office work.
You also must take care of all the legal aspects of transferring the business. This might mean making adjustments to your estate plan or creating a trust for the business. You also want to alert your vendors.
One important aspect is to make sure that everyone is on board with your choices. For example, if you have more than one child but you want only one child to take over the business, then you need to be sure the other children are okay with that. You do not want issues to arise after your death in regards to the business.
Your business succession planning is not complete until you are positive that your heir could smoothly take over and start running the business right now.