Family Business Succession–Proceed with Caution
August 12, 2015 - Posted by: admin - In category:
Many family businesses last only one generation. For those businesses that survive a transition to the next generation, it can be a difficult phase through which the business and individuals must pass.
The vast majority of small businesses fail within the first 5 years of existence. Then, assuming a business lasts past those first critical years, succession from one generation to the next is very often fatal for the company and this is due to a variety of factors and reasons. What is not unique is the reality that transitioning from the founder generation to the next succeeding generation is difficult and must be handled with great care and foresight to ensure the success of such a transition and the continuance of the business over time.
Early this week, the law firm on Davis Wright Tremaine LLP published a very insightful article on this very subject.
Among the points raised in that article are the following:
- leadership in the family business should not be a birthright or an obligation–it should be a choice
- the next generation should not be given too much power or responsibility too quickly
- the business should be presented and framed as a great opportunity (but again, a choice, not an obligation)
Business succession planning is critical to any estate plan and we are happy to assist with any aspect of your business planning.
WE ARE HERE TO HELP!