What Are The Pitfalls In Transferring Power In A Family Business?

There are many different issues that affect a family business such as climate, laws, technology, economic trends, competitors and employees. But the family business is also influenced by anything that impacts the family unit itself like skill levels, various interests of the stakeholders, marital status, the level of business participation for each person and the relative health of all members.

Handling transfer of power while balancing this climate can seem like a juggling act. This is especially true if the founder is hesitant to give up control or if the successor is not well prepared or interested in accepting it. The major issues facing a family business owner looking to transfer power to others are timing the transitions, selecting the appropriate successor, managing inter-generational conflict, providing adequate training for the successor, and ensuring a smooth transition period.

All of these can be important for the family business owner who is looking to pass on his or her company. Even if you are not planning to pass on the family business for several years, it’s a good idea to have your plans in place now in case a sudden disability or death were to alter them.