How Do You Pass Your Business To The Next Generation?
According to Australian research, family businesses are ill prepared for succession planning, appointing a new CEO, or even a strategy for the future of the business.
The first consideration is whether anyone in the family even wants to take over the business – plenty of children have no interest. Then, decide if the current owner(s) want to hand it over. Any successful transition needs both of those things at the outset.
It might be better to either sell the business, or allowing a committed employee to take over rather than a disinterested and reluctant heir. If both generations are indeed willing, then significant planning is needed.
Articulating the long-term vision for the business, ensuring that younger family members are part of the process and have time to establish themselves as owner-managers within the business, and being ready to truly step away and allow the next generation autonomy to make changes are all essential. As The Economist magazine poignantly wrote: “Inheritance is a process, not an event”.
Consider This: When did you start thinking about succession in your family business? If it was when your children became adults, is that 20 years too late?
Here is more on reading on Succession Planning.