Selling your business can be a complex and difficult process; when family becomes involved it can be even more complex and difficult. With that in mind, here are eight rules to consider if you want to increase the odds of a successful business transition to your children:
- Create a set of rules that your children have to abide by in order to work for the company, and stick to them.
- Do not create a position for your children within the company. Have then in a real position, and make them earn it.
- Pay needs to be competitive. Do not overpay or underpay your children for the job that they are doing. Other employees will notice how they’re being treated and it will affect company atmosphere.
- Make sure your children can grow the business. Selling (or giving) them a company that isn’t growing or that they haven’t been able to grow the value of over a five year period does no one any favors.
- Only give stock to family members who work inside the company. Overlooking this rule can create conflict amongst family members and threaten business growth and investment.
- Sell them the business, don’t give it to your children.
- Let go. It can be difficult to walk away from something which likely has your pride wrapped up in it, however once you sell the business, you’re no longer in charge. It’s prudent to transition your attention to something else that will engage you and let your successor run the business.
- Accept that your children will change how things are done. When they take over the business, it will be in a different phase than when you started it. Don’t expect them to do things exactly how you did.
Read full article: Kids Taking Over the Business? 8 Things to Consider
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