A business is not merely a thing. It is a mindset, an activity, and oftentimes even a lifestyle. It can get complicated. If your legacy is the family business, passing it on will require careful planning, preparation, and dialogue.
Because every business is different, as every family is different and every individual is unique, determining what is right for a family business is based on that family's values, goals, and dreams. That said, businesses have been coming and going for generations. Some have transferred successfully between generations, but most are fumbled away at when the senior family member passes on. Fortunately, there are some tried and true strategies to consider when planning for your own family business succession.
Whether your objective is a sale, windup, or succession, Forbes has provided a practical roadmap in a recent article titled “Six Steps For Making Your Business A Family Legacy.”
By heading alone, here are the six steps:
Give the family a reason to continue the family business
Develop a management team
Structure a business succession plan
Fund the business succession plan
Provide wealth replacement for other family members
Have a successful business
So what is right for you, your family, and your business? I recommend reading the original article and then consulting with your team of trusted advisors. Each of them can bring a valuable and unique skill set to the table.
Reference: Forbes (February 3, 2014) “Six Steps For Making Your Business A Family Legacy”