Mark Kohler says business succession fails because owners wait too long and don't prepare their kids. Start decades early with honest talks about the business's mission and finances. Most problems aren't tax issues but unprepared heirs who don't understand what they're inheriting.
Business owners that successfully transfer their business onto the next generation begin decades ahead of the transition. They start talking to their kids about the business, why they started the business, their vision, their dream. They ask their children if they want to have the business. They talk about the value of the business in the family. Sometimes kids have no understanding of why the business owner even started this business and their dream. We've got to transfer that same energy, passion that you have have on to the next generation before they're ever willing to pay for it or even work in it or take it to the next level. Most business failures in this succession planning, it's not because of taxes or structure. It's because of not preparing the children with the process, the vision, the dream, and the most important part in this starting early process is you yourself having a reality check on what this is going to look like. How are you going to get paid in this transition? How are you going to retire? The business may live on, but that doesn't mean you're just going to get a paycheck every day. The kids have to be able to pay you from the business profits and still feel like they're making money and have the autonomy to build the business with the passion and dream that they may have.
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