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Business succession plan: Did you choose the right successor?

Newport Beach families may dream of a son or daughter taking up the family business preserve their legacies into the future. Indeed, it's beautiful to think that something you created could last to provide income and stability for future generations of your family. However, to keep the family tradition, you will want to make the right choices when it comes to your business succession plan. Perhaps most importantly, you want to choose the right successor.

Does Johnny like spending months out of the year traveling to exotic destinations around the globe and sample cocktails and cuisine? He might not be the best person to take over the family's statewide home services business. Did Jane study business and accounting and currently play a major role in the running of your family business? Jane is clearly a great choice for your successor.

Most families won't have such a simple task of choosing between Johnny and Jane above, but the example can help you understand how different children have different personalities, different skills and different willingness to run the family business. When making your choice, consider the fact that only 30 percent of families are able to pass their businesses down to the subsequent generation successfully, but 79 percent want to. In some situations, it could be a better idea to simply sell or liquidate your business when you decide to retire.

There is a lot to consider when creating a business succession plan. Therefore, Newport Beach family business owners may want to speak with an experienced business succession attorney who can help them navigate this important and potentially complicated process.

Source: The Des Moines Register, "Three key ingredients for successful succession planning," Dana Huey, Aug. 31, 2017

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