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#1: Children should be equal beneficiaries Thus, children become equal partners regardless of their knowledge, experience or prior involvement in the business. Children must grieve the death of a parent and simultaneously work through partnership issues to make business decisions.
#2: The children can take over my business When this assump.on is not tested, children receive a giQ they didn’t want. In many cases, heirs are ill prepared to handle the business challenges they now own. The emo.onal toll on the family and the strain on the business created significant obstacles that could’ve been avoided.
#3: Employees are loyal, skilled, and will carry on Many .mes the owner is the glue that holds a business together, but they underes.mate their intrinsic value and the degree of tacit knowledge they possess. This blind spot increases the transi.on complexity because these aUributes are oQen the secret sauce behind the business success. If the secret sauce is not transferred effec.vely the business (and the heirs) will suffer.
#4: If I take care of legal and tax issues everything will be ok Legal and tax planning are important aspects, but they are not a comprehensive or strategic transi.on plan. Business owners must plan for the vacuum created in organiza.onal structure, leadership and capacity when they are no longer in place.
#5: The business can always be sold if necessary All too oQen SME owners assume their business has value and heirs can liquidate if necessary. However, business income, sales volume and even profit may not be enough to give the business sufficient market value to be aUrac.ve to savvy buyers.
Develop a comprehensive transi.on plan that considers: 1. Tax 2. Legal structure 3. Business health & sustainability 4. Economic forces 5. Organiza.onal leadership 6. Owner & Family’s future aspira.ons