An owner’s death has a substantial emotional impact

When planning a family business transition, owners tend to give too little attention to the actual operational succession of the business. While generally they spend an adequate amount of time on estate planning, tax and control matters, they often fail to ensure the executive leadership of the company is properly transitioned (or they incorrectly believe that the transition is solid).

According to some professionals, this planning deficiency occurs because business owners avoid facing their own mortality or are optimistic about others’ ability to fill the void. I maintain, however, that these owners simply do not understand the emotional impact that their death will have on their employees and family members in the business. They are unaware that these emotions will trigger natural reactions with undesirable consequences. Business owners can mitigate many potential problems by paying more attention to transitioning operational leadership.

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