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Who should take over your business when you are ready to retire?

After spending years building a successful Kentucky business, you may assume that your children will take over the reins when you retire. Although you may be excited for them to do so, you may be shocked to learn they have other plans.

The following steps will ensure that you find an appropriate successor for your business, whether a family member or someone else.

Assess your children’s interests and capabilities

Involving your children in your business while they are young can be an excellent way to assess their interests and skills. Consider offering them an opportunity to work for the company after school, during semester breaks or when they are ready to enter the workforce permanently.

Consider other options

If you determine that your children will not assume ownership of your business when you retire, you can explore other options. For example, consider selling your business to a key employee who understands your business’s operations and goals. However, this option typically requires a third-party business valuation.

Create a transition plan

Whether a family member or key employee will own your business, it is essential to gradually reduce your responsibilities while giving the designated new owner more visibility. This strategy will ensure that you can offer helpful advice while creating an opportunity for other employees to acclimate to the company’s new leadership.

Formalize the new ownership structure

When you are ready to change the ownership of your business, you will need to initiate stock transfers, formalize purchase terms and notify all employees. You and the new owner can also decide if you will provide post-sale consulting services.

Taking time to develop a business succession plan as soon as possible before you retire can ensure your company continues to thrive after you step down.