Describe how a family-owned business may prepare for management succession in case the owner departs suddenly.
What will be an ideal response?
A successful business must continue to operate even when the owner-manager leaves. If the owner leaves on vacation, plans can be easily made because few decisions need to be made and the vacationer is available, if required. When the owner takes a vacation, a form of on-the-job training is provided for those left in charge. Those persons can take over temporarily under those circumstances. The sudden death of the owner can be very disruptive if not adequately provided for. If the owner has left no will or instructions on what to do, family members will probably have conflicting opinions about what should be done. For this reason, an owner should make a will and keep it current, including instructions about what should be done in-or with-the business. The firm can take out life insurance on the owners, the proceeds from which will go to the company in case of death. This money can be used to help the business operate until it recovers from the loss of its owner-manager.
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Answer the following statement true (T) or false (F)