Family businesses have a special place in the American psyche. Knowing that a company has passed down from generation to generation imbues a company with a sense of wholesomeness in many customers’ eyes.
If you are a business owner looking at retiring soon, you may consider passing your company onto your children. These are some things to consider:
- Do your children want it? Sometimes your children have no interest whatsoever in doing what you do. In that case, you may decide to sell to a third party and give your children the cash from the sale. Yet, there is often at least one child in a family who has shown an interest and talent for the family business.
- How will it affect family dynamics? If you have more than one child, things could get complicated. Consider how you will split the business or profits between your children. Many a family has fallen out over this. If more than one wants to stay involved, consider how you will split roles.
- What experience do they need? Maybe your child has worked in the family business since they were young and knows it inside out. Sending them to work for competitors or other industries will allow them to expand their horizons and bring in new ideas. If your child intends to go to university, consider a course useful to the company.
- How will you manage the transition? Incorporate your children and build up their responsibilities gradually. Be aware of the effect their presence has on other workers. A young hotshot full of new ideas could easily upset the balance if not controlled.
Seek help to ensure you correctly implement your business succession in the correct legal manner.