How to Manage Family Business Transition
Operating a family-run business can be extremely rewarding. In the short term, you get to provide for your family, usually while working with the younger generation to teach them your trade. For the longer term, they are learning the skills and gaining the knowledge they need to take over when you retire, which leads to long-term financial stability for generations to come. Of course, what happens to a family-run business after you retire can be greatly altered due to unforeseen circumstances. Like anything else in business, the best way to avoid failure in this department is to plan.
Some Common Obstacles
Naturally, everyone hopes to have a smooth family business transition, with one or more children ready and able to take over at the appropriate time, and a simple exchange of ownership. Unfortunately, any Boston business attorney can tell you that it rarely works out this way, so planning for succession is the best way to prepare. Assuming you do not want to sell your family business to an outsider, the two most common obstacles to overcome are:
- No One to Take Over: This can be a tricky situation, but one way that attorneys can deal with this is to place ownership of the company in a family trust. From there, you can ensure that the business continues to support your future generations and follows certain standards that adhere to your trust’s guidelines.
- Multiple People to Take Over: Sometimes, having more than one successor can be just as challenging as having none. The key here is to talk about what will happen with your family ahead of time and make a real plan. Also, make sure that succession plans include what would happen should one of the multiple parties decide to sell his or her share of the company.
Consult With Professionals
Like most other business moves, consulting an experienced professional prior to laying out any plans can be one of the most powerful ways to ensure that you have a concrete plan. Finding a Boston business attorney with experience in family business transition planning can be your first step to establishing a fool-proof plan. Ultimately, you want to make sure that the transition is as smooth as possible, and ultimately you will need an attorney to make this transition.
Having this attorney as part of the initial planning will ease the process as much as possible, and ensure that your heirs can take over without complication. The last thing you want your successors to deal with is legal red tape. When it comes time to plan your family business transition strategy and you wish to seek out the best professional advisors to help with this process, contact Jeffrey Cymrot of Sassoon & Cymrot for individual guidance and consultation.