A multi-generational business is a family business in which members of two (or, in some cases, three) generations all work together. For instance, a man may start a construction company in his 30s and then bring his son on to run it with him in his 50s.
Conventional wisdom says that business succession planning should start with bringing a child into your company and working alongside them. This gives them first-hand experience and you can actively teach them how to run the business well, rather than just leaving it to them when you pass away or retire.
Your company has thrived over the course of your life, and you want to leave it to your family. You want your children to have the financial security that it provides. You're also just proud of what you built, and you don't want to shut it all down just because it's time to retire.
You own a family business. For your child's entire life, you have assumed they would take over that business. They're counting on it. Do you just want to get them a job at the company as soon as you can?
The business world is changing, and that can impact a family's succession plan. When much of the family's wealth is tied up in a family business, getting it right is important. Here are three crucial topics to keep in mind.
As you prepare to move on from your business, you start thinking about your employees. Do they now face an uncertain future? Or will they stay with the company?
If you're planning to pass a small business on to your children, you cannot understate how important it is to have a good succession plan. It's about more than just you or your heirs. It's also about the employees and the economy as a whole.
While thinking about business succession planning, you have probably come across some rather daunting statistics. For instance, a massive 70% of family businesses do not make it to the next generation. About 88% fail by the third and 97% fail by the fourth.
You own a family business. It's been successful, but you worry that your children simply see it as an easy career. By virtue of the sheer luck of being born into your family, they will always have a job waiting for them.
You have a vision for your family business that goes beyond your immediate interaction with it. You want to leave it to your children. You hope that they can in turn leave it to your grandchildren. You want to create a legacy that spans the generations and provides income and opportunities for decades to come.