Planning for the Family Business Transition: “What’s Next”
This article originally appeared here.
As a business owner, you understand that ultimately you may face the challenge that your role as a leader at your company will one day end. This can be difficult, especially if your business is family owned and operated. Or, you may have already experienced this kind of transition through an illness, death, sale, or the business being passed down through generations. If you are planning to pass your business to family, it is important to discuss it with them openly and honestly. Planning for the next generation can be challenging, but the cost of not facing this question may be substantial, both financially and personally. Investing the time now to ensure a successful transition can be impactful for the new owner, and it will show your employees that there is a bright future for the next generation of the business.
Understand the Barriers
Some of the common barriers that can contribute to a lack of succession planning may include:
- Not having enough time to properly plan.
- Fear of giving up control of the company.
- Avoiding the issue due to its complexity.
- Holding on to fear of the unknown.
- Lacking clarity as to what the succession plan should look like.
Acknowledging these possible barriers can help move the business toward starting the important process of business succession planning.
Make Your Transition a Success
Ask yourself what you want the business to look like once you are no longer the leader. The right option for your business – whether it’s a sale, a gift, or a combination of the two – will depend on a variety of considerations and your individual circumstances. Success involves being proactive and preparing for the next generation of leaders for your company. Communicating your wishes, determining a plan, and implementing those wishes will provide you with the answer to the question, “what’s next”?
A qualified attorney can help you sort through your options and can help design a business succession plan that will be in sync with what you want. Talk to your local marketing representative for a referral to a member of Federated’s network of independent attorneys.
This article if for general information and risk prevention only and should not be considered another other offer of insurance or legal, financial, tax, or orther expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all losses. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. This information is current as of its publication date and is subject to change. Some of the services referenced herein are provided by third parties wholly independent of Federated. Federated provides access to these services with the understanding that neither Federated nor its employees provide legal or other expert advice. All products and services not available in all states. Qualified counsel should be sought with questions specific to your circumstances. All rights reserved.
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