Handing Down The Family Business? 3 Strategies For A Peaceful Transition
Author: Emma Sturgis
The family business is often one that has taken years to build. It’s likely one that was started with a great-grandparent and that has been carried through many generations. However, there comes a time when a younger member of the family should take control because of an older family member wanting to retire or not being able to handle the business aspects of operation any longer. There are easy ways to make a peaceful transition so that the activities of the business aren’t interrupted.
The Business Plan
All parties should look over the business plan that is in place. It might need to be updated for the future as more technology is used and as customers will likely want different services that are provided. Try to keep as much of the original plan as possible so that older family members don’t feel like the business is being completely changed. You want to have a section with roles and responsibilities, perhaps for the oldest members of the family so that they feel like they still have a part in the success.
In order to make everything as legal as possible when it comes to how much of the business you’ll be responsible for and how much of the profits other family members will make, you should consider hiring a family business attorney like the professionals at Alternative Law. This is someone who will examine all of the paperwork, making sure that each person understands what is taking place with the transfer. Documents can be signed in front of the attorney, and the attorney can keep a copy of the paperwork in the event that anyone has questions at a later time. The heirs need to understand all of the accounts that they are taking over, and the attorney can help with this by making a list that is maintained.
When parents and grandparents feel that the time has come to let children take over a business, a trial period could be completed first to see how the children would operate the business. This is a time for the children to see exactly what goes in to making the business a success. If there are questions, then this is a time to ask before the business is signed over. The trial is also a time for the children to see whether they really want the responsibility or not.
A family business has many perks. Everyone knows what’s going on in the business, and it’s easy to find someone to work for the company. When the time comes to let someone else work in management, it’s a good idea to seek legal aid and to let the new owners have a test run before the paperwork is completed.