If you own a business you want to pass down through your family, you must focus on building a succession plan as soon as possible. If something happens to you, your family may not know what to do with your company. Without a succession plan, you cannot predict the outcome of your company.
According to the U.S. Chamber of Commerce, only 18% of all family-owned businesses have a business succession plan.
Evaluate your mission statement
Before choosing a successor, evaluate your core values and mission statement. The person you pass the reigns to should share your values and understand the importance of your mission statement to the overall company. If you want your family to continue your vision, they have to have a clear understanding of what your vision is. Successors can continue your company in your image if they know what you want from the future.
Talk to your successors
Do not forget to talk to potential successors. Make sure that the person you choose wants to own the business. For example, if your child does not want to go into the family business, you should not consider him or her for the role. The child may not have your company’s best interests despite being related. However, you may have a niece, nephew or other relatives that could take the reigns.
Discuss plans with your employees
Do not leave your employees in the dark about your decision. They may have valuable input about who they think could run the company. Likewise, you can ease their worries about the future by explaining your succession plan.
When it comes to succession plans, you should also talk with financial or company advisors before making a choice.