The family-owned business is often thought of as an American staple, the thing that forms the backbone of the economy. That said, there are many different businesses that people choose to start. They all operate much differently and those planning to pass their businesses on to their children need to plan accordingly.
Some of the common businesses that families own include:
- Retail outlets
- Beauty salons
You can, of course, break these down from their general groupings into things that are far more precise. For instance, clinics could include dentists offices, doctors offices and chiropractic offices. Retails outlets could be everything from a local grocery store to a hardware store to a sporting goods shop. The options are nearly endless. And this doesn’t even get into the specialty businesses like surf shops, climbing gyms, tourism guiding companies and much more.
In any case, you can see how the succession plans need to vary for each type of business. At a hardware store, it may be a simple matter of passing on ownership and letting the children continue to run the shop. At a dentist’s office, though, they also have to consider the long-time patients who come to the practice. Are they going to continue to do so? What types of services and options do they expect? How will retaining these clients — or failing to do so — impact the future of the business? How can the parent prepare the child for either outcome?
These are all important questions to ask, and they demonstrate why you must think through the succession plan carefully and understand what options you have.