For family businesses, succession planning should be a top priority where the idea is to pass the responsibility to the next generation of business leaders. You should have a plan that includes who will manage your business when you retire and how the ownership will be transferred. The businesses clients should not notice a change in management, so the transition should be very smooth. What makes family businesses more complicated than normal businesses is the fact that relationships are often emotional. Below are some tips to plan a proper succession of your family business:-
- Start early
Many successful entrepreneurs advice startups or prospective startups to build an exit strategy right into their business plans. This should not be any different for family businesses. The moment you are in charge of a family business, create a succession plan immediately. The more time you spend getting ready for succession, the smoother the transition will be when it comes time for you to leave.
- Involve all concerned parties.
Involving family members concerned is paramount. After creating a plan, the next stage is an open dialogue about decisions in the plan to encourage family discord. The opposite could end up being that you awarded a job to an uninterested party or create unnecessary conflict within the family.
- Analyse the plan logically instead of emotionally.
It is possible the firstborn you wish to give the highest position has no business capability or is not interested. It could also be possible that you have no capability in the family to run the business and the logical alternative is to sell the business but instead, you become so attached to the business or to the firstborn emotionally and make the wrong decisions. It is important to separate emotions from logic in succession, the future of the business should come first.
- Understand that not everyone has to be equal in the company.
While equality encourages cooperation, it may be not in the case of succession. As the person creating a succession plan, you need to understand the difference between management and ownership. Ownership can be shared equally among many but management should be left to the absolute best.
- Train your successors.
Most skills in the corporate world are learnt through mentorship. It is important that you mentor and train the successors appropriately. A good way to do this would be to work hand in hand with them in the running activities of your business. Make recommendations and remedies when still part of the company. Investment in proper training will raise the chances of success greatly.
- Consult where necessary
There are organisations that help offer services in succession planning even in the case of families. In the case where you cannot create the plan single-handedly, then leaving the opportunity to experts might be the best idea. If not a succession plan organisation, then a lawyer, accountant or a financial advisor. The main reason for this is that these professionals will handle the succession as unattached parties, therefore, more logical.
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Keywords: Family Succession, Succession Planning, Family Business.