Building a family business is a lovely thought. Creating security for your children and an income which can be grown over the years and passed down through generations, but the reality is not as sweet as it may seem. In reality your business is your baby, something which you have given lots of hard work and dedication, made sacrifices for and who knows if you will ever feel anytime is the right time to let go?
Two thirds of the UK’s family businesses think of selling up rather than hand over the reins to the next generation. It’s difficult to put your trust in someone who is close to you to hand your business over to them. You will witness their mistakes but you will also witness their achievements, either way it will be difficult to watch without getting involved. Or, it could be that you’ve just not made preparations when the time comes to let go.
You may be set in your ways, you’ve owned your business for years, it’s been profitable why change anything? Someone younger may have a different insight and new ideas which may be a great turning point for your business, but change is worrying isn’t it?
The answer behind all of this is, if you prepare for family succession (and by prepare, I mean this may take years) the process will be so much easier when the time comes. After all it's surely better to keep all your hardwork in the family rather than sell it to someone you don’t know?
How do I prepare?
Get your thoughts and feelings down on paper. What do you want the process to look like when the time comes to hand over the reins? Writing down your plan may seem really obvious but you wouldn’t believe how many business owners don’t even have a business plan! You may decide to gradually pull away from the business, maybe go part time for it a bit whilst you all get used to it. No matter the circumstance make sure your plan is known to your successor.
You may already have a family member working in the business with you but if you don’t, think about who the potential candidates are who’d you’d be happy to handover your business to. Sit down and discuss your intentions and make them aware that this is not something which is going to happen overnight. This is something you will be planning over a certain number of years. Talk them through the plan and what you want to achieve. Encourage them to voice their ideas and opinions but make it clear you’re still in charge!
Who is the right person?
The person(s) you select to hand over your family business to, needs to have shown a common interest in the business. Have they got the right experience, do they share the same ethics and values as you? The candidate must show passion in becoming a successor and not be agreeing to it to be dutiful. Forcing this on someone is not the right way to go about it. If they don’t have the ambition then your business will be run into the ground.
It’s up to you to show them the way, train them from the bottom upwards. They need to know all your processes and procedures and feel like a valued member of your team. Let them shadow you on a weekly basis, become their mentor. Just remember that every entrepreneur makes mistakes, just like you did when you first started out. It’s how they deal with their mistakes which makes the difference and it’s up to you to guide them in a positive manner.
It’s important to review your intentions together on a regular basis as business can change quite rapidly.
Inevitably in any business relationship there will be conflicts and one of the most important aspects of succession planning will be managing the occurrences. The younger generation are often perceived to be more adventurous and this for the older generation could translate as being careless! There’s a fine line between the two and you will need to find your common ground.
Why the younger generation can be inspirational to business
Technology is forever advancing and it can be quite difficult to keep up with it all. But that doesn’t mean it shouldn’t be embraced. Finding the right software for your business can be key to its success especially with the use of integrations and automations. Advanced technology can take your business to another level and this is an area which the younger generation excel.
Online presence of your business is critical in a generation where most people turn to the internet to do their research before buying goods or services. Being present on social media platforms is also essential and this may be an area where you lack experience. The younger generation have been raised only knowing this way of the world so it’s only natural that they should be the experts! Social media and the internet will allow you to exploit new opportunities for your business. As well as guiding your successor they may just guide you too!
You may find that there are no willing candidates in your family to hand down your business to. They simply may just not understand the workings of the business or not share that common interest and that’s fine. It may be a hard pill to swallow but at least you have explored your options. Your successor needs to be willing and eager to learn so that your business continues to thrive even after you’ve stepped away. If that means exploring other options then so be it! But don’t give up on your business just yet! There’s still time to enjoy, prepare and get organised!
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