Planning for the future of your business is just as important as completing your personal estate planning. Many people overlook the impacts of business succession planning and expose their company and their loved ones to unnecessary risks.
A new study found that upcoming leadership and retiring leadership have key differences in terms of their attitude and approach towards the succession planning process. Business Consulting Resources based in Hawaii recently completed a study to understand how the generational gap impacts people’s perception of the business succession process.
This study found that COVID has sped up the pace of family business succession strategies. The research found that the departing and rising generations had varying levels of differences in risk tolerance, perception of innovation, management style preferences, and lifestyle goals. The rising generation had a priority such as making a social impact, doing something special and significant, creating a better management structure with more clearly defined roles and professionalizing the business.
The departing generation, however, shared that they had concerns such as leaving a legacy, ensuring family member relationship stayed intact, and spending more time with family. These differences can create possible conflict and confusion in the business succession planning process.
In order for business succession planning to work in your California company, both the outgoing generation and the next generation need to be on the same page for maximum effectiveness. Whether you have a plan in place but you haven’t updated it in some time or whether you have no plan in place at all, the end of the year is an ideal time to revisit this.
One way to protect your interests with your business is to set aside time to meet with an experienced and knowledgeable estate planning lawyer in Pasadena. A lawyer can help you with both your individual plan and your business plans for the future.