Any business owner knows that the time will come when they must leave the business. Hopefully this comes at a time when you wish to retire and not because of your sudden death. Either way can cause a lot of anxiety for all involved regarding what happens to your business when you’re gone.
Most of us have heard or perhaps even been involved in estate ownership battles. It is common knowledge that the prospect of wealth and power is enough to turn brother against brother. While you may not be in full control of what happens after you are gone, you hold the power to ease the transition and the ability to at least ensure that your business runs longer.The first step in protecting your business for the long term is to consult with a reputable law firm, such as Albertson and Davidson to provide some legal guidance for setting up your business long-range plans.
Below we discuss a few ways to keep your business running after you move on:
- Plan early for your succession and involve your family
Most families are torn apart by the fact that it came as a shock to them that they became owners. Or rather it is the shock that they were not made owners. It is therefore almost necessary for them to know your plans in case of your demise.
Hidden families are another source of split businesses. While this cannot be avoided in some cases: let your family know that you have other children or other dependents so that in any case they are prepared.
- Analyze your children and spouse critically.
It is common for the senior most son or daughter to take over the company. But then again, they may not be the least bit interested in the business. It, therefore, comes without saying that knowing who is interested, who knows the business and who has managerial abilities will take over.
While you may consider leaving your entire estate to your spouse, he/she may not want to be the owner and manager. Take this into consideration when making you final testament.
Take your children through why you have decided on who to avoid your will being contested and overruled.
- Make it an aim to train your successor personally and work with them
Once you have figured out who is going to be the best to take over. Work with them, let them know how to go about decision making, taxes and company’s policies.
Put them on the spot sometimes so you can see how they would handle any situation thrown at them.This goes a long way in the long-term project management.After all, practice makes perfect.
- Involve your attorney in the whole process.
Professional help will ensure that you know the possible shortcomings in your will. An attorney that knows your family will also help you make a sound decision on the division of ownership and shares.
- Consider all other options
It is quite possible to change the type of company you own just to increase longevity. A corporation is more likely to remain standing even after the loss of a CEO. This is because the remaining shareholders may make a vote for a new CEO.
A sole proprietorship will most likely collapse if poorly manages by the owner. If you don’t trust your successor to stand, make the changes while ensuring that your family remains the major shareholders.
In conclusion, family dynamics remain to be a challenge when it comes to management of businesses, we must all get over the idea of equal shares because our talents and strongholds don’t remain equal.It is up to you to ensure that you plan from the beginning.This said, may we live long to prosper and see our businesses flourish!