A critical phase in the life of a family business is succession: transition of ownership and control to a new generation. We have seen far too many fumble the pass, and hurt the family, the business, or both.
Here are some tips on how to do it right.
When should you start? When you first have a member of the younger generation in a management role, some say, and there’s wisdom in that. But it will vary; the most important thing is not to leave it too late. Don’t let yourself think “We’ll cross that bridge when we come to it,” because you won’t.
Developing a succession plan that works for all is a process. It will take time, and a lot of very open discussion. Experience shows that a good facilitator from outside the family group will multiply your chances of success.
Proven keys to success in family business succession planning:
- Start with family, and family values. The business should serve the family’s purposes, not the other way round.
- Start now.
- Work with an advisor.
- Make sure everyone is included, whether they will have an active role in the business or not.
- Plan and run the business as a business. Get the best person or team in charge, and hold them accountable for results.
- Write it down, write it down, write it down!