Starting a business is the American dream for many people. There’s a sense of pride in watching your idea come to life and prosper.
Most entrepreneurs dream of having their children take over running the family business when they die. But unless it’s in writing, your company could fall apart while your children bicker.
The succession plan
You already know that just because your business is a success, you can’t step back and take it easy. Instead, dozens of decisions must be made every day. Planning and innovation keep the company moving forward. A succession plan needs to be part of the overall strategy.
Your succession plan details who will be taking over the company’s leadership when you step aside. But before you start creating your plan, it’s imperative that you first sit down with your family and have an open conversation. Let them know your desire for them to take over the family business someday, then listen to their feedback. Some children may have career aspirations other than running a business. If so, you may need to look outside the family for the company’s leadership.
You will need to outline each person’s roles and responsibilities so they can start preparing for their new position. It’s also vital that you honestly evaluate potential successors, noting their strengths and weaknesses. Create a training plan which may involve further education or mentorship. Ensure they have plenty of growth opportunities.
While you’re still leading the company, begin creating a timeline for a transition. This will allow your successor to take on more demanding responsibilities but still be able to turn to you for advice when needed.
Your succession plan should be part of an overall estate plan. It will give you and your family peace of mind that the business you created will be left in good hands and your legacy will live on.