Overcoming a Major Obstacle to Succession - Managing Family-Owned Businesses

One of the biggest and most common obstacles to succession in family business is the need for personal financial security for the senior generation. Parents will rarely let go of authority and control if they do not feel financially secure themselves. Their continued needs often conflict with the business and personal needs of the next generation. Here is a good rule of thumb: If you save and conservatively invest 10% of your income every year for 20 to 25 years, you will be able to assure yourself a full income for life without selling or controlling the business. By doing so, you permit yourself to give your shares with maximum tax advantage to the next generation and can engage in planning succession based on what is best for the future of the business and the family.