Some business owners would prefer to leave their company in the hands of someone that they know and trust. However, choosing your brother the gym teacher as your business successor may not be the best idea (unless you own a sporting goods store). Along with choosing a business successor that you know and trust, you will want to select a person that understands and is willing to take on the burden of running a company. Choosing someone with experience is also important.
The biggest takeaway from articles on business succession is that you need a plan, and you need plenty of time to construct this plan. Since transferring the ownership of the business is probably a big deal to you as the company owner, you need to put in adequate time to plan the transition.
One great way to get ahead of the game is to groom your would-be successor long before you hand the ownership over to them. This is often how family businesses transfer hands; the most engaged relative in turn receives the most training and then becomes the most qualified to take over.
If you have two family members that are competing for ownership of the business, it may be in your best interest to see if you can split jobs between them. Assign one relative to take care of operations and the other to manage the money. Allowing two people to have control over the same aspect of a business is likely to cause conflict. You want your successors to focus on running the business, not fighting, as many families can tend to do.
Your successor does not need to be a family member, however. Better to select one of your best, long-term workers rather than a disinterested member of the family.
Be sure to choose a business successor that understands your long-term goals for the company as well as has plenty of training under his or her belt. If you are uncertain who to leave your business to, contact George & Company. We have M&A professionals that can help guide you towards the best direction for you and your business.