If you have multiple children, one of the biggest business succession planning questions to ask is simple: Do you want to leave the business to all of the children equally, or are you going to pick one person to run it?
If you do decide that it is best just to leave it to one heir, you need to know how to pick the right person. You also may want to talk with all of your children, explain your decision and find ways to leave other assets to the children who will not get the business, so they don’t feel as if you’ve favored one person unreasonably.
Find out who wants the job
Never assume that all of your children want the company, even if that’s what you want for them. Leaving the business to someone who is uninterested is highly detrimental to that company and likely means they’ll just sell it or close it down anyway. Start by determining who is interested and then figure out who would make the best owner.
Help them get experience
One important step could be having your child work at the company, though not at an executive-level position. Taking a lower-level job gets them real experience, helps them understand the business and shows them what working there will really be like. This can confirm if it’s something they want to do.
Consider their unique skills
Finally, you must consider the skills the person needs and those that they have. Maybe your heir is incredibly smart but disorganized. Will they need better organizational skills? Maybe they are a good employee, but not a good leader. Perhaps they have terrific technical skills but no people skills. You must think over all of this and choose someone who fits what the company needs. This is the best way to help that company stay robust to the next generation.
Setting up the succession plan
Once you have determined who should run the company, you must learn what steps to take to set up a functional succession plan. The sooner you can do this, the better, as any extra years of training and experience will only help your heir.