Starting a business is a challenge in itself. It requires considerable work, time and money. But keeping this business in your family for generations to come is even harder. Only a third of businesses are passed down to second generations, and far fewer make it to the third generation.
Family business succession is challenging for a number of reasons; there are many obstacles one most overcome to make passing your business down to your children possible. No matter how well you plan and prepare it still may never happen, but there are certain steps you can take to drastically increase the possibility of family business succession. Colorado residents need to perform thorough research before and after opening a business to increase the likelihood that their business stays in the family.
Involvement
It’s important to make your family feel a part of the team and integral to its success. Include them in the decision making process and have them interact with customers. If somebody feels excluded or unimportant in the context of a business they’re not going to want to be a part of it, and they’re certainly not going to want to run it someday. People are going to go where they feel needed.
Succession Plan
It’s important that you began to develop a plan for succession early on, even if you plan on running the business yourself for years to come. Having an idea of who you want to run the business after you is important – who is going to be the owner and who is going to be the manager, etc. By developing a plan early, you can begin to groom potential heirs by making them more involved in day to day operations.
Transition Plan
The actual details of how ownership will be transferred should be outlined well in advance. For example, will the business be purchased outright or will it be bequeathed? It is important that a timeline is established so the transition between family members occurs smoothly.
Businesses are built through years of hard work and ingenuity. They are, in a sense, a representation of the values you hold dear. Colorado residents should be sure to seek advice from experts in the field of business planning, and to undergo the necessary planning and preparation to make this dream a reality.
