If you own a family business you are part of the approximately 64% of the United States’ gross domestic product! As a business owner, you know first hand about all the hard work that goes into owning a business.
Some day you will want to retire and it is never too early to start thinking about family business succession planning. With a detailed family business succession plan the likelihood of your small business surviving, once passed down, greatly increases.
You may envision your children taking over the family business you have worked so hard to build, but it is a good idea to take a step back and see if keeping it in the family is really the best choice for the future success of your business. Today, I have put together three key factors to keep in mind when trying to answer the important question of “Keep or Sell?” in regards to your family business.
Factors to Consider for your Family Business Succession Plan
Is your child emotionally tied to the business? If so, to what degree?
You have worked hard to build your business, your children/family will need that same emotional connection to keep business prosperous and growing.
If you feel there is a lack of connection, maybe your business is more suitable in the hands of a buyer.
Over the years, you have built relationships between customers, suppliers and key employees. If the business has thrived due to personal relationships, there is a greater likelihood that those relationships will survive when ownership is kept in the family.
Capacities of the Heir Apparent
Once you have established that your child/family is/are emotionally invested you need to evaluate if they contain the skill set necessary to keep your business afloat. Strong leadership skills, business acumen, and decisiveness will all be essential for keeping business alive. Make sure to be honest with yourself, as this is not only about your business but your child/children’s future.
These three factors are by no means meant to be an exhaustive list. There are many more personal and business-sensitive considerations that will play a role in any family business succession plan. If you are the owner of a family business and contemplating handing off the reigns to the next generation, call one of our Green Bay Business Attorneys at (920)499-5700 and we would be happy to assist you with your business succession planning process.