How do we plan the transfer of our business to another family member?

Statistics show that the majority of business owners have done very little succession planning other than a simple financial plan for their estate. There are many reasons why owners avoid succession planning:

• They may feel that they are too young to retire and lack belief in the business's ability to generate enough retirement income.
• They refuse to accept the possibility of death or other kinds of exit.
• They lack faith in potential successors, so they put off planning.
• Potential successors in the family may be merely pretending to be interested in succeeding to the leadership role, and therefore are resisting the process.
• They are confusing their personal wishes with the business's needs. Owners may want a potential successor to take over management, but the candidate may not want to or able to do so. Sometimes another owner is needed to inject fresh vision and leadership.
• The successor preparation process takes some time and money, so some owners economize by postponing such planning.

A common method for opening this communication is through an advisory board to the business, which can be as formal or informal as the owner wishes. A board of advisors will supply the owner with a neutral perspective and can often be used to govern many of the steps involved in succession planning. In many cases, a consultant is brought in to help manage the process. BDC business centres have on their roster several succession consultants.