Business succession planning is something that you certainly don’t want to put off. If you don’t start thinking about it until shortly before you’re planning to pass the business on, there could be a lot of complications. Things may not go as smoothly as you wish. This can be a major negative factor for the business and the person you’re passing it to.
In fact, some people suggest starting as much as a decade in advance. How could it take this long?
Training the next generation
The advantage to starting this early is that you can prepare the family member thoroughly. If they haven’t been involved in the business, let them get to know the company and allow them to gain some industry knowledge. By the time they actually take over, there won’t be nearly as many growing pains, and the business can simply keep functioning successfully.
If you’re planning to give your business to one of your children, you don’t want the rest of the employees to feel like an outsider has suddenly gained control of the business. If your child has been working there, those relationships are already established.
The thing to remember is that it’s very difficult for family businesses to survive through multiple generations. It just doesn’t happen that often. The best way to give your business and your family a chance to reach the type of success you want for them is to look into all of your legal options for dealing with the future of the business after you step away from it as far in advance as you can.