If you are like most owners of small family businesses, you may be running your business as if you are going to be working forever. In other words, you have not taken any steps to prepare your business for its transition to the next generation.

Whether you established your business only a year or two ago or you have been running a successful operation for decades, one of your most important goals is to ensure the next generation is ready to accept the reins and keep the company moving forward. This is succession planning, and this planning should begin as early as possible.

Why are you hesitating?

If you have not taken steps to groom your replacement or create a solid plan for transitioning out of your business, you are not alone. Nearly 50% of family business owners in the U.S. do not have a succession plan in place.

From the very beginning, you may have envisioned passing your successful business on to your children, but you have taken no concrete steps to see that this will happen smoothly. You may not feel ready to discuss stepping down from the leadership position, or you may believe you have years before you have to make that move.

Unfortunately, there are no guarantees. If something should happen to you where you are no longer around or are unable to handle the duties of running the business, would there be someone ready to step in and keep things going? Is there someone who understands your business well enough to keep your customers happy and deal with the critical issues of taxes, insurance and ownership details? Are you certain your family or other interested parties will not spiral into irreconcilable conflict and lawsuits?

Are you ready?

Do you have a clear choice for which child will succeed you as the leader of the business? How will you keep peace with the other children? What will you do if none of your children shows an interest in continuing the business? These are only a few of the questions you will have to consider as you begin your succession planning.

A family business owner planning to retire within ten years should already have certain aspects of a succession plan in place. Not only will your successor need to understand the day-to-day management, but he or she will need to know the legal and financial aspects of the business. You will also certainly want time to prepare your clients and vendors and to build confidence in your choice of replacement. Working with a skilled Tennessee lawyer is a good way to tackle some of the challenging issues you will face.

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