10 Mistakes to Avoid in Handing Down a Family Business

    1. Not making the time to plan early enough.
    2. Making decisions to fill key positions with family members based upon emotion and bias, rather than an actual “fit” for that position.
    3. Placing close relatives into these key positions without first getting an objective assessment to verify the inherent skills to be acting in those positions.
    4. No development program in place to advance the individual performance of your people to sustain the profitability of the business.
    5. Merely dividing business equally for distribution to several family members, without understanding that this is likely to lead to conflicts or discord, cascading into personal family problems.
    6. Holding onto the reins and refusing to let go, and waiting too long to turn over areas of responsibility.
    7. Keeping family members on the payroll that are not performing, particularly in any key position.
    8. Not trusting a chosen family member to have the skills necessary to make decisions and to advance the business when it is time to take over a leadership position.
    9. Never “really” retiring, but running or interfering with the business from outside, or continuing to show up and run the business after claiming to have turned over responsibility.
    10. Making the plan for business succession without outside guidance from a professional with an objective perspective, and without a clear strategy to implement the transition.

Family owned businesses can gain a distinct competitive advantage and sustained profitability if the business transition is planned objectively rather than emotionally.

Connect with Perpetual Development to understand how you can implement a cohesive strategy for transition.

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