In order to keep a family business successful even after you step down from your position as the CEO, you have to put some work when it comes to succession.
Succession is an important thing for every type of company, mainly because the owner must be sure that the next one in line can handle the pressure and all the other things that come with running a business. Second of all, the successor must keep the business as successful or make it even greater.
This is why, in today’s article, we’ll be talking about how you can make a family business succession successful. However, keep in mind that you should also rely on your family law lawyers for advice if you want the transition to be smooth.
Business Succession Planning
The business succession process must not happen on short notice and without any preparation. The planning of this process should start early, with at least five years in advance, for example.
Advisers say that the business owner should integrate an exit strategy into their business plan, for a smoother succession. They also say that with a longer time spent on planning your succession comes a better and easier transition as well.
Involving Your Family
Naturally, given the fact that we are talking about a family business, it is important to have your family members involved in the discussions of your business succession planning.
Your goal will be to analyse their ambitions, personal feelings, as well as goals, in order to see which of them would be best suited to be your successor. Obviously, you must take into account what everybody thinks and listen to their opinions and advice as well.
Approach Your Family with a Realistic View
Even though you want your first-born son, for example, to run your business, there’s much more than just blood relation that you have to take into account. Ask yourself if your son or daughter has an interest in this and the skills required to run your company?
As mentioned before, you have to look into each of your family’s members goals and ambitions in order to figure out which one would be the better successor.
Not Everyone Must Have an Equal Share
You might decide that every member of your family must have an equal share of your company. This way, you keep everyone happy and involved with your business and its plans.
However, it may not be the best idea. If everyone has an equal share of the business, there will most likely be disputes when it comes to making decisions. Instead, you should give a larger share of your business to your chosen successor.
You could also have your successor deal with management and ownership while your children, or any other relatives, deal with the financial arrangements.
Train Your Successor/s
As mentioned before, succession shouldn’t be done on short notice. While longer planning is required for a smoother transition, it also gives you the opportunity to spend time with your chosen successor and train them for their future job.
In short, you’ll become their teacher, work with them, and share all of your insights and skills that they may need after they become the owners of your business.
During business succession planning, it is recommended that you get outside help. Financial advisors, accountants, and family law lawyers can give you advice and recommendations that will definitely help the succession plan.
If you want your family business succession to be successful, you know that you must start early and that you have to take everything and everyone into account before making a decision.
Take your time when it comes to finding the best successor, especially if you want your company to keep on being successful.