Family Business Succession Planning Protects Your Legacy
Owning a family business is the dream of many families throughout the United States. There are countless success stories of families who started this dream with next to nothing in their pocket and they were able to grow and develop their company into a major hit. Although you may be enjoying a unique level of success now, something that you should always be conscious of is what would happen not only to your family but your business if something were to happen to you. This is where family business succession planning comes into play.
What is Family Business Succession Planning?
Before you can begin to put anything together for your family business, it’s important that you have a clear understanding of what family business succession planning is. This type of planning is specifically designed to put together a exit or business strategy so that your business will survive in the unfortunate event where you (or the current leaders of your business) are no longer there to run it. Over and above family business succession planning being common sense, there are also countless statistics that support the idea that if you fail to plan, you plan to fail. For example, did you know that only 3% of family business make it past the third generation of ownership? Although there are certain details associated with business that are unavoidable, there are several things that can be considered now to ensure that your business survives after you’re gone.
Key Details to Keep In Mind When Developing a Family Business Success Plan
There are several key factors that you need to keep in mind when it comes to putting together a family business succession plan. Keep in mind that these details:
• Planning is a process
Once you put together your initial business succession plan, there is a strong possibility that details associated with your business could change in the future. Therefore, you have to give yourself the flexibility to be able to change your business plan along with it.
• Encourage growth and competition
One of the great things associated with family business succession planning is that it allows you to take stock of your current employees and determine who you would like to see in which role either now or in the future. Remember, just because you own a family business doesn’t mean that each one of your children or family members may be suited to take over certain roles when you pass away. This type of planning gives you a great opportunity to find new talent and have an understanding of where things should be or are going.
• Develop key positions
Are you the type of owner that wears a different hat of responsibility depending on the situation? It’s important to remember that your successor may not be able to do all of the things that you do on your own. Therefore, you may want to consider that as part of your planning, you designate different people in different positions. Personality, responsibility and experience are all things that should play a factor when it comes to designating these positions so careful thought should be made.
Start Your Family Business Succession Planning Today!
When you’re ready to start putting together a family business succession plan, you should always partner with an experienced estate planning attorney to guide you through the process. Our team of legal professionals has extensive experience in helping to navigate family business owners through the different variables that may impact their business in the years to come. Don’t wait to put together this valuable plan. Get in touch with us for your consultation today!
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