Commercially speaking, the takeover of a family business does not differ that much from taking over any other business. You run through the same steps. A business is a family business if it adheres to the following criteria:
- More than 50 percent of the property belongs to one family.
- A majority, or at least two members of management, originate from the same family.
- The family has decisive influence on the company strategy and follow up decisions.
However, the dynamic in family businesses is often different than that of non-family businesses. The underlying bonds go further, even after business hours. Will (one of) your children or other family members take over the business? This is when we speak of business succession within the family.
Pros of family succession can be:
It is a beautiful way to guarantee the continuity of the business, which simultaneously offers the new generation a business opportunity. Furthermore, the succession within family can create tax benefits, like various succession routes.
Cons and risks of family succession can be:
Due to the family bonds, emotions can often play a strong role in the succession within a family business, especially when there are multiple potential successors. Furthermore, there is the risk that the next generation does not possess the proper entrepreneurial skills necessary to run the business.