How to pass on a family business to the next generation without losing profitability
One person often runs family businesses. We are also talking about family offices. All processes, including the strategic vision of the company’s development, depend on this person. However, when management passes to the second generation, difficulties can arise.
When management changes, there is not only a distribution of assets. When the leader changes, the company has a different vision and goals for the future. To avoid serious problems, it is important to develop a succession strategy in advance. The key is to involve the younger generation in management processes. In this way, they will not feel detached from reality and will be better able to learn the approaches of the company’s head.
What tasks of the family business will help to solve investments in property
Investment in real estate preserves capital and allows it to grow with minimal active intervention. This approach gives successors time to learn the business without the risk of losing income, which is why family offices consistently prioritise this market.
Family offices use real estate investment to achieve the following objectives:
– establish multi-generational investment committees;
– define specific roles and responsibilities for asset oversight;
– set clear rules for income distribution and portfolio management;
– simplify reinvestment procedures.
Thanks to the benefits mentioned above, situations of conflict between members of the family can be reduced to a minimum.
Property investments as a wealth preservation tool
Property investments can also be an effective tool for attracting the younger generation to the family business. For example, future successors can be involved in inspecting assets, assessing their potential, and selecting properties. This solution will help improve heirs’ financial literacy and instil a sense of responsibility. In addition, close intergenerational cooperation will bring parents and children closer together.
Diversification is important when using property investment as a wealth preservation tool. This will help reduce capital risks, especially in the long term. Assets should be spread across different sectors and types. At the same time, clear investment criteria need to be defined for the younger generation to focus on. In addition, multiple strategies can be applied to minimise the impact of market volatility.