As the owner of a Massachusetts family business, you may find that your work offers many benefits. You may, too, have plans to leave your business in the hands of a trusted family member or close confidante once you are no longer able to run it yourself, but you may be unsure about what, exactly, the process of doing so entails. At Kajko, Weisman & Colasanti, LLP, we have a firm understanding of the important steps today’s family business owners must take in order to craft an effective family business succession plan, and we have helped many clients navigate the process involved in doing so.
According to Inc., many members of the baby boomer generation are either retiring or getting ready to retire, and this means there will likely be an uptick in the number of people looking to leave their family businesses behind to their loved ones. However, only about 44 percent of families who plan to transition a business have an established, written succession plan in place.
Because failing to plan accordingly for business succession can cost considerable money and time, there are certain efforts you may want to start making now to streamline the process and avoid unnecessary hardship. For example, one of the first things you may want to consider as a family business owner is how your succession plan impacts your estate plan with regard to buy-sell agreements, trusts, life insurance and so on.
Next, you will likely want to assess the skills of your current management team to determine who you want to leave in charge down the line. Take care to avoid giving your own family members preferential treatment if others working for you are more competent, as this can lead to dissension in the ranks that can negatively impact business. If you do want to leave your business in the care of one of your children, many advisors suggest making them work somewhere else for a set period (say, five years) to give them a more honest impression of working in the “real world.” You can find more about this and similar topics by visiting our webpage.