Many traditional business owners start their business with the aim of having their family members succeed them and retain the business.
A family succession does not materialise overnight. It requires careful planning as well as a carefully thought-out strategy in managing family members.
Grooming Your Successor
- Assess the qualities of your potential successor to sift out the right candidate. The person should be committed and have an interest in taking over the business.
- Having identified the right candidate to take over your business, you should assess if training is needed to better develop and prepare him/her for the succession.
Handing Over
- You will also need to establish your role and responsibilities after the takeover.
- For example, you may want to stay on in the business for an interim period to guide the successor, so as to ensure a smooth transition.
Family Members
- It is important to seek understanding and consensus from the rest of the family members.
- You will have to manage the expectations of the rest of the family members and to resolve any potential conflicts that may arise due to the succession.
- It is important that the successor has full support from the rest of the family members.
Employees
- You will have to manage and prepare your employees for the change of management to ensure that the business continues to operate smoothly and that your successor has the full support of your employees.
Legal Matters
- You will need to resolve all legal issues in passing on the business to your successor (e.g. transfer of shares and appointment of director).
