Crafting Tomorrow’s Leaders

Handling your business legacy requires care. And it starts with you and your family. Succession planning should begin while your children are actively involved in the business. They should be a part of the process of establishing long term family and business goals. As time passes, it may become clear that one or more of the children are not suited to be a successor, so it will need to be determined what, if any, role they might have with the business.

For the children who express an interest and demonstrate the competency and temperament needed in a successor, a clear development path should be laid out that enables them to develop their skills and achieve milestone goals. It may be worthwhile to have an advisory board create a set of standards and qualifications that must be met so that an objective measure can be taken of competing children.

For children who are struggling to align with business goals, there needs to be path for advancement, as with any career opportunity, that keeps them encouraged and interested in pursuing the goals of the family business.

Oftentimes, children are assigned to the advisory board where their input is a vital part of policy development. Children who are discouraged or who develop jealousies may have to be weaned from the business, so they don’t become a disruptive force.
 

Seek Professional Guidance

It may be important to hire a financial advisor who specializes in family businesses. They can provide the objective and stabilizing influence to counter the emotional biases of family members in the planning process. A trusted financial advisor can play a crucial role in the successor development process by:

• Providing financial education, training and resources to help the successor understand complex financial management.
• Accessing loans, investment opportunities, and capital to enable the successor to implement new and improved ideas.
• Offering strategic advisory services on business planning, risk management, and market trends.

An experienced financial advisor, like American Bank, can also play a key role in developing succession plans, ensuring a smooth transition of leadership, addressing financial concerns, and preserving your family’s legacy. It’s important to prepare the next generation to lead and innovate within their family enterprises. Effective successor development can help ensure the long-term viability of the family business.