Death and loss in a family are already difficult circumstances to navigate and adding business into the equation only heightens already fragile emotions. Though difficult, preemptively having conversations about family business planning in the case of a death, especially for a family business, will prevent a disorderly succession.
Mourning a loss can be heavy and, as a leader, it is your job to help lighten the load when the time comes to pass the family business torch. While sudden shifts are rarely planned, having a response strategy in place will ensure things continue running smoothly. Separating personal life from work is almost impossible in these situations, making the topic of succession sensitive. In order to keep your family business successfully operating, there must be a swift leadership transition.
Forming a Succession Plan
It’s always better to have a plan in place and not need it rather than need it and not have it. Creating a detailed succession strategy involving legal oversight allows for a more seamless transition if one were to happen. Establish the new roles and duties for each position along with backups in case the first attempt doesn’t go as planned – a secondary plan is just as important as the primary plan.
The updated business plan needs to be formalized in writing and easily accessible to all family members who need it. Involve all relative parties in the succession planning and organize each element of the business in a concise manner. No matter the size of your operation, hiring a lawyer for your business succession planning offers formal and well-organized insight and removes emotions from the conversation. Someone unrelated to the family or business is critical to successful planning.
Addressing Legal and Financial Topics
Using legal documents to put your business succession plan in place will eliminate last-minute emotional decisions when legal and financial topics are brought to the table. Addressing plans for insurance policies, the estate, and asset allocation needs to be discussed beforehand and reviewed annually to ensure the plan’s contents are still what you wish for as a business. Speak with your attorney to ensure all components of the plan are ready to set into motion from a legal standpoint in order to prevent anything from slipping through the cracks.
Grieving
Not only is your business grieving the loss of a leader, but also the loss of a family member. Emotions are heightened and the succession plans may feel like a sensitive topic for the family business. Take time to mourn your loss and respect each person’s grieving process. Researching a grief counselor in your area for your family and employees to consult allows them to seek professional help and guidance during this difficult time.
Unexpected death in the family business can forever alter the way the business functions but with proper planning, your business can function adequately and prevent the doors from closing. Having these conversations is tough but they are much easier if there is a plan in place.
If you’re a leader in your business and have yet to create a succession plan, contact our credentialed and trusted team at Positively People for guidance – we encourage you to get started on one immediately to keep your business running smoothly for future generations!
