As you prepare to move on from your business, you start thinking about your employees. Do they now face an uncertain future? Or will they stay with the company?
Every situation is different, but remember that even many third-party buyers want to keep key employees, if they can. It helps the transition go more smoothly. It gives them someone who really knows the business inside and out. Some sellers even create bonus systems, essentially paying people extra money if they’ll stick around, rather than looking for new jobs.
But maybe your plan isn’t to sell the company and leave the money to your children as part of your estate. Maybe you want to pass the company itself on to the children.
These same benefits still hold true. In an ideal world, the child you plan as your successor is already working with you. He or she knows the employees and understands what they bring to the table. As you pass the company on, you can have a plan that retains everyone on staff, if you’d like. It’s only going to make it easier for your heir to work with people who have been doing this for decades.
As with anything, communication is key. Talk to your heir about the succession plan. Talk about the value of the employees — not just the sentimental value they have for you, but the real daily value they can provide your heir. Take steps to make sure that they stay with the business as things move forward.
At the same time, make sure you look into the legal steps you’ll need to take to pass the company to the next generation.
