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Succession Planning for Family-Owned Businesses

Succession planning is the process of identifying and developing new leaders to replace current leaders when they leave or retire. This is crucial for all businesses, but especially for family-owned businesses, which typically need to consider the family legacy and values they want the company to sustain in the future.

Succeeding with Succession

Family-owned businesses may hesitate to plan for the future because they are uncertain of how the interests and decisions of family members will play out over the years. However, effective succession planning will mitigate any uncertainties and set the stage for a successful transition.

Succession planning should be a strategic process, and it should start with an evaluation of the company’s current state and then with an outline of its desired future state. To begin, the leadership team should define and address the company’s goals and potential challenges. With those in mind, they should then identify the qualifications and expertise needed to meet those goals and deal with those challenges. It will then be easier to evaluate potential candidates for the role.

A Succession Journey

The next step is to seek out and prepare a list of the potential candidates. Family-owned businesses should consider options that will preserve family ownership but that also meet the needs of any shareholders, trusts, or foundations. After all options are explored, it’s time to create and execute an actual plan. With a formal plan in place, leaders will be able to more easily manage the transition and focus on the future of the company.

There are many decisions regarding the future that should be kept in mind while planning. Who should lead the business? Who should own the business? What are the common values the company needs to preserve? How should the wealth transfer? Family-owned businesses should develop answers to these questions to properly plan for the future. Seeking help from an advisor will make the process more manageable. Our team of advisors at Symmetrical can guide you through the succession process and explain the role it plays in future success. Contact us today for more information.

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