Business Succession Planning
Family businesses are sometimes, more often than not, very complicated and hard to understand especially for those not affiliated with the business. Therefore, business succession planning is even more important for the closely held family business. It is sometimes very difficult to transition a closely held family business to the next generation while simultaneously fulfilling the needs of the current newly retired business owner. Very often those interests conflict. Family differences between younger and older generations can be quite complex. Divorce, death, different social values, ownership percentages, health issues and old resentments can be major contributors to disputes between family owned businesses. Engage a team of trusted professional advisors. Update the current plan to reflect where the business is today and where the owners want the business to go. Come to an agreement on the businesses vision, goals, and objectives. Evaluate the leadership, ownership, and involvement of all key stakeholders both family and non-family members. Establish reasonable retirement expectations and timelines for the current generation of owners. Pinpoint the leaders, managers and crucial staff and set business goals of next generation. Ensure the plan is comprehensive, realistic and documented in writing. Make sure the plan is properly communicated to all family and non-family stakeholders. Update the plan to reflect any changes that will influence the transition of the business. Not every closely held family business will survive to the next generation. However, proper planning, open communication and common goals will help to overcome many obstacles that stand in the way of successful business continuation and succession.
Informational purposes only.