Business hand-me-downs: Put your succession plans into place
After starting a business in New Jersey and seeing it grow into a successful company, it may be hard to retire and let someone else take control. Pouring hard work into a business for many years is difficult for anyone. Creating a business succession plan ahead of time may make the transition easier.
One businessman plans to hand over his company that his grandparents founded 91 years ago to his son. Mixing business and family often makes sense because the successor already knows so much about how the company works. But the transition can be difficult for all parties involved. Parents want to see their children succeed but also want to protect the business.
The businessman inherited the company from his father -- who himself was forced into running the business after World War II. Certainly that was not an idyllic transition, and the man now wants to shelter his children from such obligations. A successor who assumes control of the business out of a sense of obligation is likely not the best candidate for the job.
Business successions without family members involved can be equally tricky. Releasing control of operations could be extremely hard without a competent and trustworthy successor in place. After all, a business owner can never truly walk away -- his or her legacy will always be intimately tied with the business's success or failure. Conversely, an owner who stays too long can seriously hinder the business. Potential successors, like the businessman's son, can have fresh ideas. He is introducing e-commerce and other technologies to his father's traditional company.
Then another element enters the equation: the economy. In an unpredictable market, stable business management is crucial. Creating a succession plan is the best way to ensure a smooth and successful transition. An experienced business lawyer can help put an airtight business succession plan in place.
Source: Chicago Business, " 'Wanting it is only part of it'," Lisa Leiter, May 14, 2012