Deciding on a succession plan that’s right for your business takes careful consideration. Many business owners devote themselves to running a successful family business with the hope of one day passing it on to their partner or children.
But before assuming this is the right decision for you, you’ll need to evaluate your individual circumstances and weigh the pros and cons of various options. After all, no two businesses — or children! — are the same.
Should You Hand Your Business Down to Your Partner or Kids?
Handing down the family business to your partner or children might seem like the obvious choice. After all, a key incentive for starting a business in the first place is the idea that you will be leaving behind a meaningful legacy in your family name.
Understandably, you’d want your partner or children to share that passion, and it’s also comforting to know that you could be providing financial security to your descendants for many years to come. Before making the final decision, however, it’s important to ask yourself the following questions:
Do They Have the Necessary Knowledge to Do a Good Job?
If your partner or children have little-to-no experience working within your business, they’ll likely do a terrible job of running it. You want someone with the skills and the know-how to drive future success for your business, not drive it into the ground. Less experienced family members can still be part of your business’ future, but perhaps they’ll need to start out in more junior roles.