If you own a family business and you’re leaving it to your children through a succession plan, you’re essentially just telling your children that they are going to become business partners.
Is this actually going to work, or can it create some issues for the business?
Success is possible
History tells us that success is certainly possible. The Wright brothers famously invented the airplane, one of the most important inventions of all time. However, there are also plenty of examples of companies and endeavors that failed. How do you make sure your children are successful and do not just quickly run the business into the ground?
Communication is one of the most important factors. Siblings need to be able to talk about decisions and work together, rather than feeling like they are competing. It’s also important for them to know what their roles are. These should be defined in your succession plan. If they both think they are in charge of the same tasks or decisions, the conflict will be endless.
Best of all is setting up a plan that uses each sibling’s strengths and covers their weaknesses. Maybe one is a great people-person who can’t balance a budget, while another is great with numbers and data but flounders in group settings. If you can give them roles where they don’t overlap and they both thrive, they’ll have success and avoid disputes.
Setting it all up
Are you interested in setting up a business succession plan or at least considering your options? Our experienced law firm can help guide you and answer any questions you may have. Working with an advocate can help you spot potential problems and find solutions — before there’s a major issue.