Are you the proud owner of a family business? If so, you probably have big plans for the future of this business. In case you inherited this business from your forefathers, it is understandable that you want your children to follow in your footsteps. I am assuming that this business is respectable and lucrative, which is why keeping it alive is worthwhile. Self-employment and working with the family appears to be a wonderful arrangement at first glance. You don’t have to work for a stranger, the fruits of your labor don’t go to a third party, and you get access to several other privileges that come from being with family.
How easy is it to preserve a Family Business?
The family business might be running nicely right now, but will your heir/heirs be able to keep things as they are? You may handover the business with high hopes, but you cannot be so sure that the designated successor is capable of shouldering the responsibility. Family business succession planning can give rise to unexpected strife. Believe it or not, less than 10% of family businesses make it past the third generation. Not to mention, very few businesses maintain their original identity and principles over the course of generations; this may or may not be a good thing.
Common disputes with Family Business Succession
The primary cause of conflict in these matters is typically the generational gap. Generation Y and Z does not agree with the ways of Generation X and Baby Boomers and vice versa. The Silent generation may not support the ideologies of either, but that is a topic for another day. Another major setback is sibling rivalry or differences between multiple successors. If your offspring doesn’t get along or is constantly competing with each other, the business would suffer because of their personal problems. If you are to choose a single successor, then that would again raise all sorts of concerns and displeasure.
Business succession is usually easier when you only have a single legal heir, or if only one of your children is interested in taking your place. Assuming that an individual has 3 children who later give a total of 12 grandchildren, the transitioning gets a lot more complicated. The question is that will the business be able to accommodate everyone in the bloodline? At the end of the day, everyone wants a piece of the prize, regardless of their contribution.
Choosing a Successor
Even if the business is sizeable and can make room for a growing family, not every single heir deserves to be a part of it. Each one of the potential successors may not have what it takes to manage the business. You may have your eye on one of your children, believing that they have the necessary skills and aptitude to continue your work. However, it is not so easy to cut off the rest or tell them to be silent partners.
The situation gets even more nerve-wracking when the successor of your choice is not ready to take the reins. Their passion may lie someplace else, so they would bluntly refuse taking over the business. Another child could be more than happy to replace them, but then you may not be willing to accept them in that position. Sometimes all the children abandon you to pursue careers of their own choice, so you can forget about retiring anytime soon.
Be Reasonable
The family business is not something you can force upon the next generation. Sometimes selling the business and dividing the proceeds among heirs is the best solution. You should celebrate your good run, and let your children establish their own legacy. Another option is to compromise and give a chance to the successor who wasn’t your first choice. If your heirs want to do things their own way, let them. The changes they make might take the business to new heights. It is very important to openly speak with the potential heirs, so that you can understand each other. Whatever conclusion you and your family arrive to, the next step is to consult an expert. Family and Business Law Attorney in Bellville, TX, can provide valuable advice and ensure that you pursue the best course of action.
Lawsyst offers the best software programs for the ease of lawyers, practitioners and law students.
We are binging some of them to the light.
Lawsyst offers Family law software to deal with all your lawful family issues, Health law software that deals with your health related issues.
Legal case management software manages all the legalities regarding case.
Legal billing software that handles all your charging and solicitations issues.
It also offers Bankruptcy law software deals with all the debt cases and provide a great help.
