For family business owners, handing over the company to the next generation is about more than changing the name on the office door. Without careful planning, a transition can cost a company employees, customers and value.
As Business Report writes in its latest issue, Lance Kinchen, a partner in the Baton Rouge office of Breazeale, Sachse & Wilson who advises clients on business succession, says the solution is to start preparing well before an owner expects to retire.
That means making sure the next generation actually wants the job, giving them experience across the business and gradually increasing their responsibility. It also means introducing them to customers, vendors, lenders and other key relationships before the transition takes place.
Clear communication is another critical step. Family members, employees, managers and co-owners need to understand what the transition will look like and why the successor is qualified. Without that communication, uncertainty, jealousy and conflict can follow.
And the plan shouldn’t stop with a family conversation. Written agreements and estate documents can spell out how ownership will transfer and what happens if an owner dies unexpectedly.
Kinchen outlines five steps family business owners can take before passing the reins—from preparing the next generation to putting the succession plan in writing.
Read the full story from the latest issue of Business Report.
