Most small business owners have a desire to leave a legacy; a successful and thriving business that can be passed on through the generations. History is full of many that have been successful in doing that, including some of the biggest around today: Ford; Wal-Mart; NewsCorp, (owned by the Rupert Murdoch family); these all have been passed through generations. Even though they are but a few decades old, history has shown that some families can keep control of their business empire for even longer, even centuries. The oldest on-going business still involving family members is the Rothschild family, which has endured for over two-hundred years and remains a banking and financial powerhouse.

Passing on a business through the generations is no easy feat, and though 90 percent of American businesses are family owned, only 30 percent are successfully passed on to generation #2 and just 15 percent make it to the third. According to the SBA they also generate over 50% of all new jobs and have family direction by the most “senior” family members (over age 65) in 13% of the cases.

If you are a business owner, you need to ask yourself, “What is my succession plan?” Will I sell my business? Go public? Pass it on to family members? If your plan is option three, it is never too early to start planning and with a New Year just beginning, here are FIVE Steps to get you started:

  1. Treat your business as a business and do not get caught up in family emotions or strife. If there is internal family adversity or challenges, like financial or healthy issues, it is wise to keep that aspect separate.
  2. With that in mind, create a clear Business Plan and Employee Manual that spells out each person’s responsibilities, functions and Roles.
  3. Keeping it “in the family” is a great plan, but getting outside help and guidance is critical. Don’t be afraid to share the good, the bad and potentially the ugly when seeking professional advice. A corollary to that is to not get forced into hiring Family members that may not be qualified or committed.
  4. Be clear on financial compensation and be sure that most, if not all, family members involved with the business, agree on what that means.
  5. Create a written and involved Succession Plan, one that most family members agree on. Adversity, misfortunes and accidents can happen at the most inopportune time, so do not procrastinate in this responsibility.

For all you entrepreneurs that are creating and running a business, look at the Big Picture and be sure to update your Business Plan continually to address all these changing issues.