Most business owners expect some day to pass on their pride and joy -- most likely to their children, but possibly to an employee or an outside buyer. This change in ownership is what will fund the owner's retirement and carry the owner's creation down through the generations. Yet many small- business owners make mistakes when it comes to succession planning that can thwart their dreams.

	Daniel Marsula/Post-Gazette

Waiting too long to plan. Many business owners leave succession planning until the last moment, if they plan at all. Yet an ideal succession plan requires laying the groundwork over many years -- some experts recommend planning your exit strategy from the day you start the business. How you want to exit the business tomorrow strongly influences how you structure and operate the business today.

Assuming your children will take over the business. While many children want to eventually take over the family business, not all do. Perhaps your child really wants to be a schoolteacher or minister or doctor instead of the owner of a small factory. It's critical to talk to them about what they see for themselves. Encourage them to work in the business, but don't pressure them. It's not fair to them, and it will probably be a disaster for the business if you try to push them into a role they don't want. You'll want to know their desires as soon as practical in order to pursue other avenues if necessary, such as selling to a valued employee or outside buyer.

Dividing the business equally among heirs. Ultimately, one person needs to run the company. That's why it's critical to plan well in advance, to see who among your children or management team has the talent and genuine desire to run your business. And if a child doesn't want to be involved in the business, devise a way to leave the child nonbusiness assets such as insurance or perhaps nonvoting shares in the business.

Waiting too long to give real authority to the heir. Another common mistake is to wait too long to give genuine responsibility and authority to a potential heir. Many owners never give it up until the day they retire -- only to learn painfully that their heir isn't up to the task. Involve them in your decisions and let them make decisions. Let them build the needed relationships with vendors, employees and customers. Let them make mistakes. You made mistakes, too, when you were starting and growing the business.

		Write us To submit a letter or an essay for consideration for The Private Sector, please send it via e-mail to Business@Post-gazette.com or via regular mail to Post-Gazette Business Section, Private Sector, 34 Blvd. of the Allies, Pittsburgh, Pa. 15222. Please include your telephone number, municipality and return address for verification.

Not letting them work for another business. Sometimes encouraging an heir to work for someone else before committing to the family business can be valuable training and can give him/her a clearer sense of whether he/she ultimately wants to run the family business.

Being secretive about your plans. Business owners frequently play their succession plans close to the chest. Perhaps they're worried about stirring up family conflicts, or they just don't like to talk about the family money. The sooner you can inform your heirs about your succession plan, the sooner they can make their own plans. It also gives you time to modify the plan, if necessary. Keep them informed, perhaps through periodic meetings.

Not thinking of your retirement years. Retirement can be difficult for small-business owners because often their business is the all-consuming center of their life, even their personal identity. Without a clear sense of what an owner will do in retirement, sometimes he or she drifts back to the family business, intervening in business affairs that others have been positioned to manage.

Business succession planning is complicated. Outside experts can be invaluable, particularly someone who can lead internal meetings and ease conflicts through his knowledgeable, objective perspective. With the proper planning, however, this process will ensure the success of your business for many more years to come.