Passing control to the “next generation” can be stressful. It doesn’t matter if it’s a family or non-family business. One way or another, things are going to change, and for the exiting or transitioning owner, those changes come with risks: loss of control, dependence on the next generation to perform, reduction in income, changes in how major decisions will be made, the impact on the employees and customers, and determining how to value their ownership interest, just to mention a few.
This requires a different mind-set than running the business. And, it’s emotional. Unfortunately, because it’s uncomfortable for all involved, this decision is often postponed or poorly handled. It’s more than putting a plan or structure together. And, it’s not just about money. It’s about ensuring that everyone involved feels that their interests and needs are protected. This can be challenging. Yet, the survival of the business and the preservation of its value often depends on the succession plan being done right.