Whenever I sit down with business owners and ask them where their business is going to end up, the majority of them have the same answer: they’ll give it to their kids. But even if business owners transition their business to their family, it is not without risk. So, if you’re an entrepreneur who wants your children to continue your business legacy someday, what are the things you can do to make a successful transition?

In this episode, I discuss selling your business to a family member and transitioning your company to your children. I describe the “Three Generation” rule and share some studies about the longevity of family businesses. I also highlight the risks involved in selling to family members and share my advice on how to groom your children to be your business successor.

 

“Start your child in the business as soon as possible working from the bottom up. Let them get to know every aspect of the business.” - Justin Goodbread

 

This week on the Financially Simple Experience:

 

• Why it’s important to assess whether a family member is a viable business successor
• The “Three Generation” rule and how long businesses usually last
• The reason family businesses last longer than publicly-traded companies
• What makes businesses cease operations and why companies quit
• The oldest companies in the world and what contributes to their longevity
• The risks involved in transitioning a business to a family member
• Preparing your child to take over your business

 

Resources Mentioned:

 

• Book: The Centuries of Success by William T. O’Hara

 

Our Favorite Quotes:

• “Family business is not without risk if you’re dealing with a transfer.” - Justin Goodbread
• “As you’re picking your successor, you need to figure out if the business is in line with the future of the successor.” - Justin Goodbread
• “If you’re going to transfer your business to your child or children, your employees, customers, vendors, and bankers all have to have confidence that this child knows what they’re doing.” - Justin Goodbread

 

About The Financially Simple Podcast If you are looking for a podcast that speaks directly to the challenges and puzzles of running a business, you’ve come to the right place. The Financially Simple podcast was built for you. With over 400 episodes and counting, our host Justin Goodbread covers a broad range of topics, from starting a small business, to prepping it for sale, to growing your personal wealth. Justin’s combination of analytical skills, tough love, and a healthy dose of experience delivers practical ideas that will benefit business builders at every stage of their business journey. 

If you have questions, or comments for Justin, submit those at: https://financiallysimple.com/ask-justin/ Connect with Justin: Financially Simple newsletter Facebook LinkedIn Twitter Subscribe Here: Apple Podcast Spotify Google Podcast iHeart Radio Stitcher

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Financially Simple is a division of WealthSource Partners, LLC (“WSP”), which offers investment advisory and financial planning services. All investing involves risk of loss, including the possible loss of principal. Past performance does not guarantee future results and nothing in this podcast should be construed as a guarantee of any specific outcome or profit. All market indices discussed are unmanaged, do not incur management fees, costs and expenses, and cannot be invested into directly. Business planning services offered by WealthSource Business Advisors, LLC (“WBA”).

This podcast is distributed for informational purposes only. The content of this podcast represents the views and opinions of Justin Goodbread and/or the podcast’s guests and do not necessarily represent the views and/or opinions of WBA, WSP or their affiliates or representatives. Statements made in this podcast are subject to change without notice. Neither WBA, WSP or their representatives, the podcast’s hosts or its guests have an obligation to provide revised statements in the event of changed circumstances. Statements made in the podcast are not to be construed as legal or accounting advice or as personalized advice of any nature. Listeners should conduct their own review of any statements made or strategies discussed and exercise judgment or consult with their own professional advisor to see how the information contained in this podcast may apply to their own circumstances.