Enjoy Retirement: Succession Plans Are Critical for Family Businesses
Who’s going to manage your business when you retire? Will your business continue? Will you sell it? And if you sell it, how will you transfer ownership?
These are tough questions and many times just thinking about the answers is reason enough for family businesses to simply put off succession planning. While business succession planning should be a priority for every business, it is particularly crucial if you own a family business.
Unlike other businesses, relationships and emotions can drive decisions and pose complications. The family dynamic can take a difficult process like succession planning and make it even harder.
For many family businesses, family is the primary focus of succession planning. As a family business owner, you worry not only about the business but also about how decisions will affect you and future generations. More than 70 percent of family-owned businesses do not survive the transition from founder to second generation. In many instances, poor tax planning or discord among family members can be the cause. Both of these issues can be readily addressed in a good family business succession plan.
Implementing a Succession Plan
So where do you start? Here are some tips:
- Start Planning Early
- Involve Your Family in Discussions
- Be Realistic and Plan Accordingly
- Train Your Successor
- Seek Professional Assistance
Enjoy Retirement: You’ve worked for hard for retirement and you deserve to enjoy it. A good succession plan can ensure you have the funds you need to retire and that the business you have built continues to thrive in the hands of the next generation.