If you assume your children will take over your business and only discover they're not interested when it's time for you to exit, chances are it will hurt more than your feelings.
As I explain in the video below, this situation is also likely to negatively impact your business value on exit.
A situation where the next generation will take over a business requires vastly different preparation than that required for a third party sale.
Declining trend
When we conducted some family business research a couple of years ago, we found businesses that transition between generations are the exception, not the rule, and represent a declining trend.
Communication between family members is crucial to ensure there is agreement on whether the next generation will or will not take over, and these conversations should be regular dinner table events by the time the children are teenagers.
Just because you have passion for your business does not mean your children have inherited the same enthusiasm. Never assume!
If you need support or advice regarding family business succession or sale to a third party, contact the team at JPAbusiness on 02 6360 0360 or 02 9893 1803 for a confidential, obligation-free discussion.
James Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.