Why Family Businesses Should Have Succession Plans

The family drama surrounding an aging media mogul — and his unresolved succession plans — are at the center of a hit television show.

This week, Craig Siminski, of CMS Retirement Income Planning, shares an article highlighting the reasons why business owners might need to take the time to develop a thoughtful succession plan:

For family businesses, succession plans are designed to ensure the orderly transfer of ownership and leadership to the next generation. Relationships among family members are sometimes just as complicated in real life as they are on TV, and monetizing a closely held business to help fund retirement often takes longer than expected.

In fact, only 18% of family businesses have a documented and communicated succession plan in place. Much like the fictional billionaire in “Succession,” some leaders avoid the issue because they love running their businesses and don’t want to stop any time soon.

But one never knows what the future has in store. Even if you are happy, healthy, and determined to stay involved in your business for years to come, you might be glad you took the time to develop a thoughtful succession plan.

Set a Target

It might be wise to have a realistic retirement date in mind. Any effort to identify and groom a successor might take longer than you expect. And if you plan to sell your company, it could take several years to find a qualified buyer, begin the ownership transition, and finalize the transaction. To get the best possible price and terms, you may need to focus on…

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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 22 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.

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