Stephen owned a successful health care business in the San Francisco Bay Area. He knew the time had come to transfer ownership of his business. He had started the company over 25 years ago, had poured his energy, talent and money into it and was proud of its success. Stephen had two sons working in the business and when he contacted me to discuss a transition, it was clear he wanted to keep the business in the family. I knew Stephen to be a take-charge person but as I listened, I realized he had many concerns. 

If you are a typical business owner, there is a good chance that you want to transfer the business to your children. Recent surveys confirm that fewer than 1 in 3 succeed. Even these estimates may be optimistic and my guess is that less than 1 in 10 family businesses are successfully transfered to the children. 

Still, it is in your best interest to understand the advantages and disadvantages, realize the difficulty of this type of transaction, and prepare your business for the possibility, indeed the likelihood, that it will be conveyed to another type of buyer.

Advantages

• Fulfills personal goals of keeping business and family together
• Provides financial well-being for family members
• Allows you to stay active in the business with your children
• Allows you to control your departure date
• Enables yo to fix value and sell for what you need to live on  

 

Tags: business exit strategy, business successor, exit your business, financial security, leaving your business, transfer of business ownership, transfer your business