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Many successful business owners may feel that bequeathing the family business to a child or other heir is sufficient enough in ensuring the business' continuation; however, it is of vast importance to have a succession plan in place to ensure a smooth transition of ownership and management of the business. In developing the succession plan, it is of great importance for the owner to speak with his/her attorney, accountant and financial adviser; and regularly consult with them on a regular basis to keep the plan timely.

The first major issue to consider in the succession plan is what the owner wants to happen to his/her company in the event that he/she retires, is disabled, dies, or otherwise becomes incapacitated. If the owner decides that he/she wants the company to continue in his/her absence, then the matter of succession must be decided: does the company go to a spouse, children, or other heir; be it familial or an outsider. Should it be the latter, then the owner must decide on a mechanism in which the shares of family members/heirs are bought out.

If the owner decides that he/she wants to give the company's ownership over to an heir or heirs, a couple other factors come into play. Is ownership given to a spouse or children (or combination) who have shown in interest in the day to day operations of the company or is it equally divided amongst heirs, even the ones who really have no vested interest in the company other than having a share of the ownership and any profits? Family politics in regards to succession of ownership is a tricky minefield that not only can tear a family apart, but the business as well. In fighting can lead to sabotage, the ending of relationships with historical and valuable vendors and clients, the tarnishing of the business' image, etc. Delicate care must be taken and a number of factors taken into consideration in choosing who will take over the reigns of the company when the owner is gone. Most owners, more than likely, will want to choose someone who is trustworthy, who knows the inner workings of the family business, who can manage the business and various relationships, and who has a vested interest in the company's survival other than a pay check and/or an inheritance.

A second major issue to consider is the changing tax laws governing inheritance, estates, business, etc. For a succession plan to be implemented successfully and without much turbulence, it is of great importance to keep up-to-date with the laws and tax codes

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