If you own your own business, you likely picture this business being in your family for several generations to come. However, this is not always the case, and it is often due to poor planning. If your future generations are unprepared to take on different aspects of your business, then it is likely going to fail. A great way to ensure that your business is going to thrive when handed down to future generations is to create a family business succession plan. To create this plan, you can meet with a consultant who specializes in dealing with family business succession. They will help you to focus on what is most important and will break down the planning process. This article will discuss 2 crucial aspects of family business succession planning.
Ownership Succession Planning
Perhaps the most important issue to take care of is who is going to have ownership in the business. If you don't take the time to determine who owns what parts of the business, it is likely going to be given to your spouse or distributed to your children if you pass away, who may or may not run the business as you had hoped. Also, if you don't plan out which children are going to own what portion of the business, there are likely going to be disputes among them that can lead to the business ultimately failing.
Talking with your spouse and your children beforehand, telling them who is going to own what aspects of the business, and then creating a detailed plan with the help of your consultant is the best way to go. Having this legally written down is going to ensure that everyone knows who owns the business, thus helping it succeed.
Management Succession Planning
Once you have determined who you would like the business to be handed down to, it is crucial that you teach them exactly how to manage all of the different aspects of the business. They may have watched you run the business for years, but if they aren't actively involved in the detailed aspects of the business, then they are going to have no idea how to manage it and delegate out responsibilities. You are going to want to talk with them about managing the marketing, finance, sales, and all other departments of your business that must be run properly in order for the business to continue to grow and thrive.Share