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Deciding who should take over the family business

On Behalf of | Jul 30, 2021 | Estate Planning

Building a business can be an exciting venture for you and your family. While the company may start as your personal goal, your family can be a significant part of making your idea a success.

Some family members are better candidates than others for taking over the family business. In some cases, your family may not have enough motivation or interest. You may need to look to someone else to assume control of the company after you pass away.

Here’s what you should consider when you are deciding who will inherit the family business.

Have honest conversations

Children do not want to disappoint their parents. Even in situations where they have a strong opinion, children often do not want to give the news that they do not have the same goals their parents have for them.

As you think about the future of your business, pay attention to what your child enjoys and the level of interest they have in the company. A child who is not interested in assuming your role after you retire or pass away may not feel comfortable saying so directly.

When you talk to your child about taking over the family business, try to create an atmosphere where your child is comfortable saying “no.” If you can get an honest answer from your child, you have more time to make an alternative plan if your child is not interested.

Make a plan for a successful transition

Developing your idea into a successful business did not happen overnight. It will take time and training to help the next owner of your business get started on the right path. As you prepare your successor, consider helping them develop their skills with activities, such as:

  • Shadowing each position in your business
  • Taking specific classes
  • Working on support projects
  • Practicing industry-related skills

When you and your successor have a plan in place for a positive transition, it can reduce anxiety about the future of your business.