A succession plan is just as important for your business as it is for your personal assets. The COVID-19 pandemic has encouraged many people to think about their estate plans. I’m getting lots of calls from people who want to create a will and healthcare directive. But equally important for those clients who have businesses is a succession plan. For those who are running family businesses, a plan is also needed if you want your children or other family members to take over when you’re gone. This week, the Wall Street Journal had a good article about The Tricky Task of Handing a Family Business to the Next Generation. There can be a variety of challenges for a family business. How good is the communication between generations? Is there even a succession plan in place? Can the current generation even let go and move on?
Tips to Help With The Transition
The easiest way to make the transition flow smoothly is to have a succession plan. It is hopefully planned out, discussed and negotiated by the central figures involved. Some people may not like the plan, but at least there is a clear plan.
The tips from the Wall Street Journal are,
- Communicate, communicate, communicate
- Create a clear, written transition plan
- Figure out postwork life well before transitioning
- Don’t hang on when it’s time to let go
As you can probably tell from the tips, the article from the WSJ focuses on the view of the owner passing on the business. Much of the communication that is needed would flow down from the top. But it’s also important for the younger generation to be open and able to communicate as well. This will help to create the clear (and written!) succession plan that will help this all happen.
For those family members who are exiting the building, the final two tips are more for them. But they also relate back to the younger generation who may want the founders of the business to remain involved. While you may not be expected to put in the grueling hours you once did when you started your business, you may still be an asset. Many of your customers signed up with you years ago. They want to see you are still involved. It gives them peace of mind to know a steady hand is still available. Especially in these turbulent times, some added experience to be drawn upon is a major asset for a company.
When it comes time to create your plan, don’t just go to some website and download someone else’s plan. What worked for them could be a complete disaster for you and your business. Take some time to think about the plan and work with professionals who can craft the right plan for your business.
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Next Steps
Does this pandemic have you thinking about the long term succession plan? I’m open and available for to discuss options with you. Call my office to set up a phone or virtual Legal Strategy Session and we can review the best options for you – (877) AMAYERS.
