Choose The Right Sucessor To Your Family Business

While choosing a successor for business can be a daunting process all by itself, when it comes to a family business, you can expect the matters to be at least three times more complicated. Family relationships can often complicate the election of a successor to the business and create unnecessary distress, which may further harm it. An important thing to know, for any pressured family business owner, who is about to retire, is that the family business transition planning is an option that may or may not be taken, depending solely on your decision.
You may want to decide to sell your company after you no longer are the leader. If you would want this to work properly, you would have to maximize the company’s value and ensure that the accounting systems are working flawlessly. Increasing your sales, expanding to new customer bases and having a stable amount of new employees flocking to your business is a good sign that your business will most likely have a big value on the market.
The best way to ensure a prosperous future of your business is to plan early. You should always keep in mind that assigning management and assigning ownership to a successor are two different things. For example, transferring management of your business means that the successor you have chosen will get to be the leader of the business itself, making crucial decisions about the directions the business will move in. Transferring business ownership means that you will be able to create as many shares as you want and assign them to as many members as you want, whether they are actively involved within your business or not.
Try to start planning the transition about five years before you think you will retire. Even 10 years before would not be overdoing it. A lot of business advisors will often recommend that you instantly build your own exit strategy, even as you are building your business plan. The more time you have to tackle this matter and thoroughly discuss it with all of the family members involved, the more likely is the transition going to be successful. You should also be sure to update all of the involved family members regularly and let them know how you feel about the future of your business.Keeping them out of the loop is only going to generate a lack of trust.
A lot of family business owners, especially parents looking to pass their business on to their children, are not able to look at their sucessors realistically and base their plans on what they see. For example, you may want to leave the business to your oldest son, who may not even be remotely interested into running a business, let alone have the skills to do it. The reason this sort of a choice is so difficult to make is because you  are declaring one of your family members as a future owner of your business, while you need to look at them objectively, in order to see their strengths and weaknesses.