Passing the torch in a family business: identifying successors | Bangkok Post: business

BY INVITATION

In a column earlier this year (Structuring a transition plan for a family-owned business, April 28), we looked at succession planning and how it is often the biggest challenge facing family-owned businesses. Who to choose is the question facing an increasing number of individuals seeking to transfer ownership of a privately held business.

The first decision involves choosing among three options: selling, passing ownership and management to family members, or allowing the family to retain ownership but not management.

While business owners and managers are usually adept at dealing with change, the same cannot always be said for identifying and grooming their successors. Why? Because they worry about how the business will fare after their departure. They are concerned about meeting the needs of managers and family members who are not in line for succession. And they are afraid of compromising personal relationships or creating irreconcilable family rifts. Overwhelmed by worry and fear, they let their emotions get the best of them, making poor decisions or the wrong choice altogether.