Though many wouldn’t guess it, the transition of your business to a family member can be the hardest transition to pull off.
Naturally you would assume that handing off your business to like-minded individuals whom you love, and who love you, would be easier than any other passing of the proverbial torch; however, this is not always the case.
When transitioning your business to your children or other family members, there are a myriad of other factors to consider that exist outside the financial sphere. With family comes conflict, emotions, and sentiments – on top of everything else you must consider when making the big change into retirement. The unfortunate, but very true reality of the transitioning to a family member is that simple family conflicts have the potential to completely derail the entire process.
It is quite typical for business families to suppress their conflicts in the name of professionalism, which can lead to uncovering some hard feelings from past situations when it’s time for you to make your exit from the company. Any change as large as transitioning has the potential to turn into a power struggle no matter how much your family loves you. The key to smoothing relationships and maintaining transition momentum is the understanding that the problem at hand is unlikely the actual issue, but an old wound reopened.
There really is no perfect formula for timing a transition, or for creating a succession plan. Every business is different, but the key to success in any situation is to accommodate opportunity and manage risk. You simply must understand your own family situation and the business environment around you. No matter what your situation warrants though, it is best to recognize that the sooner you address these issues, the better.