Your family-owned and run business can be the greatest gift or the greatest burden to the people you love, if and when something happens to you.
If you’ve planned well and properly for your business to be continued, managed or sold, it will be the gift that keeps on giving and shows your family just how much you cared about them.
If you have not planned well and properly, it will be the gift that keeps on taking and creates an energy, time, and resource drain that costs your loved ones years of headache and leaves them with a nightmare of a mess to clean up.
Fortunately, you are reading this article now and there is still time to take these three actions that will make it far more likely your family business legacy creates the outcome you desire.
Organization and Formalities
One of the key elements in creating a family business legacy you can be proud of is organization and following formalities you think may not apply to you.
The truth is that with a family business, it’s even MORE important to follow the formalities. Your family deserves it.
This means having an updated operating agreement governing the operations of the family business, clear terms with any partners, in writing, taxes up to date, and clarity regarding who takes over and how when something happens to you.
Some things to consider: Who will be in charge of daily operations? Who will make personnel decisions? What about inventory? What is the chain of command? How will clients and customers be handled? If you have partners, will they buy out your family after you are gone? How? In what time frame?
Considering the answers to these questions now will save your family a huge amount of stress and leave them with the biggest gift you can possibly give them. If you do not want to deal with it now, imagine how they will feel dealing with it after you are gone and be willing to do what’s hard. We can help and make it far easier.
How do you know what to communicate about and who to communicate it with?
In most cases, not knowing has left you mute. So here’s your list, and if you don’t know what to say, call us to help.
First, communicate with your team members to let them know you have a plan for what to do if and when something happens to you and let them know the plan! Then, communicate with each of the people you’ve named in your plan so they know what to do if and when something happens to you.
If you do not yet have a plan to communicate, call us, we can help.
Integrate the Younger Generation
In most cases, the key to a successful family business legacy is to involve the younger generation sooner than you think it’s necessary and beyond your comfort zone.
When you can involve the younger generation by inviting them into a conversation and connection about the business early on, in a way that has them feel appreciated, you’re on the path to creating something far more than what you have now.
Integrating the younger generation can be a challenge, if you do not know how to meet them where they are, so contact us for support when you are ready to do it.
It’s worth it to ensure that the hard work you have put in over the years to build your business will be there to support the people you love, rather than leaving them with more work to clean up the parts you weren’t willing to face.
As a Family Business Lawyer™, one of their primary services is a LIFT Start-Up Session,™ in which he/she will guide you through the right choice of business entity, location of business entity, start up agreements, intellectual property protection, employment structuring, insurance, financial and tax systems you need to start your next business and succeed right out of the gate.