Many people say that you should avoid mixing business with friends or family. Nonetheless, there are countless successful family businesses out there – and they remain family businesses through good succession planning.
As you get older, you may start to consider who should take over the reins from you, and your preference is family members. What are the key benefits of keeping the business within the family?
Your family may have high levels of experience
It can be hard for kids and young adults to gain work experience or summer jobs, but this hasn’t been an issue for your kids. They’ve taken an active interest in the business from a young age, including working there during the school holidays and once they graduated.
What this means is that they have years of relevant experience. This is something that you can’t buy or bring in from outside the family. Having a family member take charge with their in-depth knowledge of the company, passion and pride can be a significant benefit.
Reduced employee conflicts
Even the most loyal employees tend not to stick around forever. This is especially the case in non-family businesses, where employee turnover rates are significantly higher. Employees often leave due to disputes, which can cost the business money long-term.
Your family members, on the other hand, are more likely to be in it for the long haul. Annual employee turnover for family businesses sits at just 9%, which makes for a more efficient operation.
If you want to keep the business within the family, then it’s important to implement the appropriate plans to make this happen. Seeking legal guidance can help you find out more about the steps you might want to take in your succession plan and how to incorporate that into your estate planning process.