Many family businesses fail shortly after the transition to the next generation. Often, this failure is traced back to ineffective succession planning.
So what should you do to plan for the future of your family and your company? Below are three tips that can help at this time.
Focus on collaboration
It is important to offer guidance and instruction, but you also want to take in younger generations’ perspectives and focus on collaboration with them. This needs to be a joint process between both generations and, potentially, between siblings who are going to be taking over the business together. When everyone is working toward the same goal, the chances of success are much higher.
Get started early
It’s also important to start early so that the successor can receive training and instruction on the job. Ideally, it may be a good idea to bring the next business owner on a few years in advance. This way, they get some hands-on experience helping to run the company without being fully responsible, so that any mistakes can still be rectified. By the time they fully take over, they’ll be ready.
Demonstrate positive qualities
Finally, it helps to demonstrate the positive qualities that focus on the future of the business—and to look for those in a successor. Some of these include competence, care, reliability and sincerity. With these core tenets in mind, a successor is more likely to be effective.
As you make your business succession plan and move through these various steps, take the time to carefully look into all of your legal options.