As a business owner, your company will be among the things you consider when drafting an estate plan. Business succession can be a delicate subject. And one of the issues that complicate it is whether to leave the business to children or sell it.
Here are some factors to consider.
Are they excited about the idea?
Running a business needs passion and willingness. Are your kids excited to run the business? Your children may have supported you with the company, possibly since they were young, but this may not mean they want to take it over. They shouldn’t take over the company just to make you happy, as this may affect the business – your legacy may not continue as expected.
Thus, before making major decisions, have an honest conversation with your children. Ask them how they feel about inheriting the business. If one or all your kids are excited about the matter, you can leave the company to them. But if they are passionate about other things, you may need to sell the business.
Are they part of the business now?
If your children are excited about inheriting the company and are currently a part of it, you may have an easier time. If they are willing to take over but are not part of it, have them work for the company while you train them over time.
You need to pay attention to your children’s skills. For example, your kid may be good at managing finances but not employees. You can rectify such a shortcoming or you may sell the business and request the new owner to keep your children at roles they are skilled at.
Business succession can be complicated. Consider getting legal guidance to understand the steps to take.