How to Talk to Your Family About Business Succession

Estimated Reading Time: 5 minutes

Benjamin Franklin once said, “If  you fail to plan, you are planning to fail.”

From day one, you had a vision for your business. You set goals, created strategies, and tackled every challenge head-on. Your business has thrived because of your foresight and determination. But if your plan for success doesn’t include a roadmap for passing the business on when it’s time to step back, your hard-earned legacy could face unnecessary risks.


For small family businesses that weathered the pandemic and now navigate a tough economy, succession planning might not feel like a top priority. But if you’re approaching retirement or simply want to prepare for the future, now is the time to have crucial conversations with your family and put a plan in writing.

The Succession Challenge: Why It Matters

Running a business comes with plenty of challenges—hiring and retaining good employees, staying competitive, managing inflation, and dealing with labor shortages. But one challenge often gets overlooked: what happens when the founding generation is no longer at the helm?


Business succession planning is about more than just handing over the reins—it’s about ensuring your company continues to thrive for generations to come. Around 70% of family businesses hope to pass the company down to their heirs, yet many lack a concrete plan to make that happen.


Whether you always intended to create a multigenerational enterprise or recently decided to keep the business in the family, the key to success lies in having a well-structured, actionable plan.

Why Succession Planning Matters

Many business owners lack a concrete plan to transition leadership.

Why Succession Planning Matters

Without a plan, your business could face unnecessary risks.

Why Succession Planning Matters

70% of family businesses want to pass the company down, but few have a clear strategy.

Steps for a Smooth Family Business Transition

The U.S. is currently experiencing the largest wealth transfer in history, with older generations expected to pass down $70 trillion between 2018 and 2042. As Baby Boomers retire, many find themselves unprepared for business succession.


The good news? You don’t have to be one of them.


Whether you’re getting ahead of the curve or making up for lost time, here are essential steps to guide a seamless transition:

  • Develop a Long-Term Plan

    The best time to start succession planning is when you start your business. The second-best time? Right now. Ideally, you should begin preparing five to ten years before you plan to step back. This gives you time to identify the right successors, train them, and handle the necessary legal and financial details.

  • Define Roles: Ownership vs. Management

    Not everyone in the family is suited for leadership—and that’s okay. Some may excel at running day-to-day operations but lack the vision for long-term strategy. Others might be better suited as owners rather than managers.


    Think about who is best equipped for leadership roles and consider non-family employees for key management positions. The business can remain family-owned even if non-family members hold critical roles.


  • Separate Family from Business

    Loyalty is important, but competency is key. A family business should be run like any successful company—by the right people, not just the next in line. Hard decisions may be necessary, and not everyone will agree. Bringing in outside advisors, such as attorneys, financial planners, and business consultants, can help keep discussions productive and business-focused.


  • Prepare for the Unexpected

    Life rarely goes exactly as planned. A succession plan should include contingency strategies in case:

    • A chosen successor changes their mind or takes another opportunity.
    • The person you originally selected for leadership isn’t the right fit.
    • An unexpected event (death, disability, or illness) accelerates the transition timeline.

    A strong plan accounts for multiple scenarios, ensuring the business remains stable no matter what happens.

  • Put Everything in Writing

    A succession plan that isn’t documented is just a wish. Just as you wouldn’t operate your business without contracts and agreements, your transition plan should be legally formalized. Key documents include:

    • Shareholder agreements
    • Operating agreements
    • Employment contracts
    • Buy-sell agreements (to facilitate ownership transfers)

    These should align with your estate plan to prevent legal conflicts and tax issues.


Key Challenges in Business Succession

Managing leadership transitions effectively.

Key Challenges in Business Succession

Ensuring continued business success after stepping back.

Key Challenges in Business Succession

Balancing family dynamics with business needs.

We’re Here to Help

Stepping away from your business doesn’t have to mean letting go completely. You may choose to remain an owner, act as an advisor, or continue investing in the company post-retirement.


No one builds a business expecting it to fail. But without a solid succession plan, even the most successful businesses can struggle to transition smoothly.


We can help you navigate every aspect of succession planning, from leadership transitions to legal documentation and tax strategies. Call us today to start planning for the future of your family business.


Call Us
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