Family business succession: Overcoming barriers |
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Family business succession planning: How to start the conversation


When it comes to planning the transfer of their 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.