Providing legal excellence for over 65 years in Kentucky

Tips for transferring your business to the next generation

On Behalf of | Jun 16, 2022 | Articles

When you started your family business, you dreamed that one day you would retire and a family member would take over the business, keeping it a financially valuable enterprise for the next generation. While family succession can work you do not want to alienate current employees in the process. The following are some tips to help the transition of the business to the next generation run smoother.

Prepare for the transition

You can help current employees prepare mentally for the transition to the next generation by being honest well ahead of time. You can let them know about your intent to transition your business to a relative once you retire. You can even share this information during the hiring process.

You can also make your successor a part of the workplace before the transition takes place. This makes your successor a familiar face and someone current employees are comfortable with.

Show your successor is competent

Current employees may fear that a family member successor will slack off, knowing their rise to ownership is set. To assuage these fears, you should make sure your successor is shouldering their responsibilities. You may even have your successor work longer hours or take on tougher tasks. Current employees will feel good knowing that your successor is competent, accountable and a hard worker.

Training your successor

You may feel duty-bound as the owner of your business to train your successor. However, including non-family employees in the training process helps these workers feel they are valuable employees. Moreover, it can help the successor remain humble because they are willing to learn from someone other than family, fostering an atmosphere of respect.

Transitioning ownership of your business to a relative can be tricky. You do not want it to look like nepotism. By taking care to include your successor in your business in a constructive and respectful manner you can help the transition run smoothly for everyone involved.