How to do it.
If you own a small business, there is probably at least some part of you hoping to pass the reins on to one or more of your children. After all, spending so much time and effort on something that’s not going to last doesn’t sit well with most entrepreneurs.
It may be difficult to look at your children when they are small and envision them running your company some day, but it can happen if you plan for it. Here are some tips:
Start them out young.
Exposing your children to the family business should start when they’re young. Talk to them about what you do and why you love it. Attitude counts for a lot – if you come through the door complaining every day, they probably won’t want to go down that path.
Start them out somewhere else.
Every child needs to know they can succeed on his or her own, and are not just working in a company because a parent owns it. Your company can also benefit from valuable experience gained elsewhere. Once your child graduates from college, they should go work somewhere else for a few years.
Start them out slowly.
Once your child is ready to join your company, they need to start where you did – at the beginning. Their expectations may be higher, but they won’t learn the company inside-out without first paying some dues. Have them report to someone other than you, then see how they fare. Move them along slowly and be sure to let them become acquainted with your customer base so your customers will be comfortable when it comes time for a transition. To cut down on resentment among other employees, be sure to make it clear as early as possible that a family member will be taking over the reins some day.
Start them out differently.
If you have more than one child who is interested in working for your family business, they probably have different skill sets. One may be better as a CFO and one may have CEO talents. One may be better just sitting on the board. Parents have a tendency to want to equalize, but every child is different – let their skills and interests guide you.
Start with a plan.
A business planning attorney can help you formulate a succession plan that will ensure continuity for the business when it’s time for you to step aside. Your business succession plan needs to align with the goals of your estate plan to protect your assets.
Our successful work with owners of family businesses is based on a simple concept: we treat our clients like family. Most of our clients are in business out of love for their families, and we believe it’s critical to not only take care of your immediate business needs, but also to help you look to the future to ensure your life and business leave a legacy of care and love.
To learn more about our personal approach to business succession planning, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.