You spent a lifetime building a successful business. Do not let a poor succession plan destroy your legacy.
A successful transition of ownership affects more than your legacy, however. The U.S. economy relies on small businesses. According to Bankrate, 99.9 percent of all companies are small businesses. Avoid the following mistakes to preserve your family, community and others who rely on your business.
Do not push the business on your kids
It is very common for children to take over their parents’ businesses. However, do not assume they have the same aspirations as you. You should not, for example, pass along the business to children who have no active role in the company. Consult with your kids about what they want without pressuring them into anything.
Do not wait to start planning
Some people believe you should begin thinking about succession the day you start a business. This is not necessary, but there is no such thing as planning too early. Do not make the mistake of waiting until you are at death’s door to plan.
Do not wait to entrust responsibilities
Additionally, you should start delegating authority to the heir before you retire. This allows you to evaluate their performance and change heirs if necessary. See how they handle challenges and let them grow into the role over several years rather than overnight.
Do not keep your plan a secret
Keep your family and business associates in the loop. Suddenly springing your succession plan on the company does no favors for anyone involved. Some calculated secrecy is not always bad, but your heir should be public knowledge.
Passing your business takes a lot of work, but planning early eliminates some difficulties. Start talking with potential candidates today about how they would run your business.