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What are ways to plan a family business succession?

| Aug 3, 2020 | Family Law |

Like many business owners, you may want to hand off your business to one of your children upon your retirement. However, some businesses do not survive a transition to the next generation. In many cases, business owners do not recognize that what worked for them as a head of business may not work for their sons and daughters. 

According to the Harvard Business Review, a successful business succession may involve more than just giving your oldest child the CEO position after you retire. You might have to consider breaking with past tradition in order to head off possible problems that could derail your succession, such as conflict among your children over leadership decisions your child makes. HBR explains some succession tips that may assist you. 

Refrain from picking a successor early

Consider holding off on committing to one of your children as your successor. You might put a lot of pressure on your child to live up to your standards, plus you might provoke jealousy among your other children. Keep your plan fluid enough that if you want to choose someone other than your eldest child, you may do so. Consider focusing instead on moving the right people into powerful positions in your business. You might find in time that one of them may serve as a better successor. 

Openly discuss your succession plans

As part of your business succession plan, keep your family members in the loop about how you want your succession to go. Ask for their advice and thoughts on the matter. Your children may have ideas about how their generation could run your business. An open dialogue may create a view of the future that you and your children share, which could do a lot to minimize or eliminate familial conflict over who should succeed you. 

Seek advice from other parties

You might know other business families who understand the same issues that you are currently experiencing with your business succession plans. Consider asking them for advice. Even if their experiences differ from yours, you could gain insight that you would lack if you only looked to your own family and your own business history.