Previous … Introduction to Passing Down Your Family Business – 6 Essentials
1. Choose Your Family Successor(s) Wisely
If you are typical of most business founders, you could probably attribute your success to a combination of strong technical and/or people skills, business savvy, and sustained passion & perseverance for what your business does and the value it brings to others.
So are you sure that “Chris” (your intended successor) really WANTS your business, and that it is right for him/her?
You may be a hard act to follow. Does Chris feel the same passion and commitment to the business as you do? Depending upon family circumstances, sometimes it is just “assumed” or “expected” that Chris will want to continue the family legacy – an underlying pressure unknowingly (ok, sometimes knowingly) imposed by others. Aside from their comfort of growing up alongside the business, would Chris have had the same interest or have made the same decision to acquire the business if it wasn’t already in the family or “expected”? Or more objectively, would Chris be better off following his/her own dream or pursuing a different path based on their own unique skills or passion, with your same support? Have you asked, I mean REALLY asked AND actively listened, and earnestly explored the other “what if” options? If there is more than one ‘Chris’, how will you manage the inevitable imbalance that occurs in divvying up responsibilities, level of involvement in, or commitment to the business or in some cases the decision not to become involved in the business at all?
Also, you know what it took for YOU to survive, but what about Chris? Does he/she have (or have you taught) the necessary people skills, technical abilities, the needed business knowledge and savvy, and does Chris have the innate passion and perseverance it took for you to not only survive, but to thrive? A telltale question – If you were hiring from outside the family for the position, would Chris make the short list or at least have the potential to work up to it?
Possible initiatives to mitigate your risk…
- Initiate the candid discussions earlier rather than later, discuss your respective personal goals for the business, and actively listen. Plan for and address the imbalances up front and early.
- Be objective with your expectations. In the best interest of the business, your successor’s abilities should match anyone you would hire from outside to run the organization.
- With early planning, consider work experience for your successor OUTSIDE your business to diversify their experience, see other business cultures/models, and broaden their knowledge & perspective. He/she will bring back new approaches, great ideas, new business contacts, broader business experiences, and will ultimately make your business better for it.
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