In any kind of endeavor there is a moment where the control should be passed down to the next generation. It can happen in many ways - as passing the control to an offspring, or to an outside controller, or one can consider selling the business. This paper will provide the process for a successful succession to the business owners. .
To define the meaning of family business, will be used the following definition: "a family business is a business governed and/or managed with the intention to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families" (Massis, Chua, and Chrisman). The transition of power from one generation to another is not an easy process. It is a complicated process because family businesses have several other issues that work against the successful continuation of the business. The main issues include generation transition, alignment of interests between current owners and others becomes more pronounced as members retire and turn over the power to the new generation, balancing of financial returns, creating agreements about whether there is synergy between return for retirees and creation of capital to offspring, the interest of one family member may not be aligned with another family member, and estate and inheritance issues. To a successful succession first it is important to understand the complexity involved in the plan of succession. The succession involves both personal and business interests. That is why it is important to plan as early as possible and involve a neutral outsider who knows about the family and the business to facilitate emotional discussions. The offspring know that they will be welcomed into the business if it is their choice and they prove their competence. The support from the company is very important to success too.