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Can you avoid the trend of failing family businesses?

On Behalf of | Nov 30, 2022 | Estate Planning

If you are a business owner, you certainly want that business to thrive. You may have heard people talk about how often family businesses fail, and it’s definitely a concern. You can see a clear trend showing that most businesses will not make it to the second or third generation successfully.

However, rather than accepting that this is simply what the future will look like for your family, you want to try to buck this trend and avoid having the business fail. You want to pass it on to your children and their grandchildren, and your hope is that this business becomes an asset that generates an income for your family members for generations to come. What steps can you take to make this a reality?

Start the planning process as early as you can

First of all, don’t put off working with the heir that you want to take over at the business when you leave. Start working as soon as possible. Bring them in early and give them on the job training. If they simply take over on your last day, they’re going to experience a lot of complications that could be avoided if they just spend time learning directly from you before taking over.

Consider the skills your heirs possess

We also want to think about your heirs very specifically, especially when leaving a business to multiple people. What skills do they have? What areas do they lack? How can you find jobs for them within the company that are going to reflect these skills? Even if you’re leaving the business to everyone, that doesn’t mean you have to do it evenly or that they need to have the same roles.

Putting your plan in place

Leaving a business to someone else can be difficult and complicated, but you can see just how important it is to get it right. You don’t want your business to be part of those daunting statistics. Be sure you know exactly what legal options you have to set up the correct estate plan for you, your business and your family.