If you are the owner of a small family business, you need to think about what is going to become of your business when you are no longer here to manage it. Will one of your children take over the everyday operations? Will a 50/50 partner buy out your share? Or will your business just close its doors when you are no longer around to open them? It is a lot to think about, but Renton estate planning attorney Dan Kellogg can help you strategize a succession plan that will work best for you and your loved ones.

Tips for Succession Planning

If you are reading this, then you are already thinking about succession planning. Here are some tips to get you started:

  1. Don’t Put Off Succession Planning for Too Long.

Experts advise that the longer you spend on succession planning, the smoother the final transition will be. Start planning your exit strategy five to ten years advance of your planned retirement.

  1. Involve Your Family.

Because the decisions you make in regards to the family business will affect everyone and not just the person/persons you plan on leaving the business to, open a discussion regarding your succession planning strategy with your family members at the beginning of the process. This is the best way to ensure that everyone is on board with your decisions, and to incorporate their feelings and goals into the overall plan as well.

  1. Be Realistic.

Many owners of small, family-based businesses have firm ideas about who is going to take over the company one day and the company is going to continue to be run when they are gone. Oftentimes, though, the person they plan on leaving the business to (often a first born) wants no part of the family business, or if they do, they want to make major changes. When planning for the future of your business, examine all the strengths and weaknesses of possible successors. Be as objective as possible, and think about not only what is best for the business, but what is best for your family as well.

  1.    Remember: Not Everyone Has to Have an Equal Share.

Too many business owners get caught up in the notion that each successor has to have an equal share, but this is simply not the case. If you believe that your daughter would make a better CEO, but do not want to leave your son out completely, grant your daughter 75 percent share and your son 25 percent.

  1.    Train Your Successors.

Too many people leave their business to a loved one without ever having trained them. This almost always leads to the business’s closing. When you have determined who your successor is going to be, start training him or her a year or two before you decide to hand over the reins.  

Consult a Succession Planning Lawyer

At the Law Office of Dan Kellogg, we help individuals plan for their future, and for the futures of their loved ones. If you are worried about what is going to become of your family business when you are gone, it may be time to start thinking about succession planning. Reach out to estate planning lawyer Dan Kellogg at 425-227-8700, or use our online contact form, to schedule a consultation today.