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Family Business – How to Plan Its Succession

Most family businesses die soon after the founder dies because there was no succession plan in place. Rather than leaving it till later, you should start planning for family business succession now. Among other issues, not having a succession plan in place can result in substantial tax implications for family members, even your employees and managers are at risk.

Start by Identifying Your Goals

Make sure all stakeholders are part of the business succession planning; these include your family, partners, employees and managers. You should consult each part as you plan succession. You should adopt the following tips;

  • Schedule lots of group meetings targeted at your succession plan. You should also fix meetings to speak with key players in your company.
  • Come up with a formal agenda that would govern the meetings, to help each person stay on track.
  • Don’t stray from the focus of the meeting, which is the intended succession plan.
  • You should prioritize managers and family members in the succession plan, bearing in mind they are the ones to carry on the family business actively. Also, transition will be smooth and your plan well accepted when you involve these key persons in your succession plan.

Spell Out Your Own Goals

Also, your own goals in respect to what you desire for the business should be clear. You should clearly and articulately define your legacy and values. For instance, you should spell out when you want to retire and how the business should carry on when you do. In this case, adopt the following tips;

  • Analyze your desired income when you step down and other possible sources of income, to help you determine the amount that will accrue to you as retirement income from the business.
  • After determining and summarizing your key goals, print it out and hand to the stakeholders – family and managers.

Explore Available Options

The main thing is to determine your ideal, then go ahead and assess variety of methods that can help you get very close to the plan. In this case, you should adopt the following tips;

  • Your unified set of goals should highly consider the expectations and hopes of other key players – this is actually the best case scenario.
  • Your family dynamic should also be a priority – factoring in family stake holders that don’t easily get along.
  • Seek the opinion and input of others – family members, partners, managers, and professional advisers before concluding on a particular plan.

So, go ahead and adopt these tips for successful family business succession.

Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! Inspires entrepreneurs build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.

3 Responses to “Family Business – How to Plan Its Succession”

  1. Robin Pullen says:

    You are so generous, The Legend Daven Michaels!!!

  2. Jan Yager says:

    Thanks for everything Daven, this was super helpful!

  3. Heidi Heron says:

    Good advice, have some of the pieces in place need to get more in place.

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