Because you hold both your family and your business close, you certainly want to ensure that you take care of them. As a result, when you begin thinking about your retirement or possible demise, you will want to know that your family and company remain in good hands. Fortunately, business succession planning could prove useful in this respect.
When thinking about who you want to take over your business and how you want the company to continue to operate, you will likely have many aspects to consider. Wanting to keep the business within the family is understandable, especially if your children already work as part of the company. However, you still need to make sure your successor is the right fit for the job.
In order for a succession plan to prove successful, a willingness to move onward and upwards needs to exist between both you and your successor candidate. If your candidate does not know whether remaining in the family business is what he or she wants to do long-term, it may be wise to consider another person rather than trying to force the company on an unwilling relative.
Additionally, you need to present a willingness to accept change and the fact that you will no longer be in charge. Once you choose a candidate, you can work to groom and guide that person while you remain at the company. However, you may not want to rule with an iron fist as your successor may have valuable ideas that differ from your own but that could still help the company thrive.
While keeping the business in the family may be your goal, you may want to prevent your children from having a sense of entitlement in regard to their ownership or management of the company. It may be your intention for your child or children to take over, but if they simply believe that they have a right to run the company, it could set a negative tone throughout the company, especially among those with more experience or who have worked harder.
Luckily, you can help your children avoid feelings of entitlement by having them gain work experience outside the company, not forcing them to have an attachment to your business and allowing them to obtain formal education.
In order for your succession plan to prove successful and legally binding, you may want to take steps to create a formal plan. While verbally informing your child that you want him or her to take over may seem well enough, you may need to remember that various steps are involved in the succession process, and having written and binding instructions for your departure may prove beneficial.