For many, starting and growing a family business is part of achieving the American dream. In fact, according to Grand Valley State University, there are roughly 5.5 million family businesses in the U.S. If yours is one of them, passing your venture onto your child can help you cement your legacy.
Deciding whether to hand off your company to your son or daughter is not something you should take lightly, of course. Still, knowing whether your child is ready to take over your business can help you plan for both your retirement and the future success of the venture.
What is your child’s opinion?
It can be easy for any parent to push his or her interests onto the kids. Nevertheless, if your son or daughter does not want to operate your business, he or she never may be ready to take it over. Therefore, you should try to have a few different discussions with your child to see what he or she wants to do.
Does your child have the necessary talents?
Successfully operating a family business requires intelligence, skill and grit. If your son or daughter lacks any of these, he or she may run your company into the ground. Accordingly, choosing a better-suited successor probably makes more sense.
Does your child have time to train?
Even if your child wants to run the family business and has what it takes to do so, he or she may need some training. This is where successor planning can be key. Indeed, after figuring out the identity of your successor, you should devote considerable time to training your child to assume leadership.
Ultimately, with the right succession plan and training approach, you can equip your child with the tools he or she needs to run your family business successfully.