Building a successful business takes hard work, careful planning and significant foresight. When a business has been able to maintain its success for a significant period of time, owners and/or executives must begin the task of succession planning. Family owned and operated businesses face particular challenges in this area.
Building a family business is hard work. Planning for its continuation after the founder retires or passes away may actually be harder. A succession plan is something that's very specific to each business. There are various elements that may work for one family business and not another.
Recently, the Wealth Management.com published some tips on succession planning in an article titled "Succession Planning for Family Businesses."
The tips include:
- Keep compensation for being a part of the business and any inheritance separate, making sure younger family members are invested in the business.
- Train younger family members how to run the business and teach them about financial responsibility at the same time.
- Communicate your succession plan clearly, but keep it flexible enough so it can change when circumstances change.
If you have questions about making a succession plan part of your estate planning process, talk to an experienced estate planning attorney about it.