When Business is Personal: Succession Planning for the Family Business

Family man deciding on a succession plan

Nobody wants to think about retiring and leaving their family business, but it’s one of life’s certainties. Whether you retire, sell up, or leave because of health issues, it’s crucial that you plan properly for that day. This is where an exit or succession plan comes in, which specifies who’ll take charge of your business upon your exit.

The Importance of a Business Succession Plan

Planning for business succession could admittedly be a hard and awkward conversation matter. However, having this dialogue is important to make certain that the family business remains a success well after you have gone, regardless of your exit. This could also help in preventing intergenerational conflict.

For example, a common scenario in which the parent expects the child to run the family business when the parent retires. Connolly Suthers and wills and estates lawyers in QLD explain that more often than not, there are unspoken expectations that could shock the intended child. This won’t happen with a crafted business succession plan in place.

Creating a Business Succession Plan

Here are some practical guidelines when creating your business succession plan:

  • Make sure to inform everyone about your plans even before you create your succession plan. This way, you’ll see who’s interested in doing what and who’s not. Ensure that everyone knows about their future roles in the family business.
  • Focus on the future of your business. Who’s the best person to lead? Are you looking for growth? If so, how big? Or are you planning to sell it? Think carefully about how you will distribute the business assets to relevant individuals.
  • Make your business constitution as specific as possible. This would make certain that your descendants understand and carry on your core business values and goals.

No one knows where life will end. When it comes to your family business, advance planning for unexpected events is crucial. A great business succession plan would aid your business transition as seamlessly as possible to the new person in charge, ensuring that your business will thrive even without you at the helm. Make sure that your plan is realistic and achievable, complete with measurable milestones and reasonable timetables.

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