It is only natural that many family business owners are keen to hand their businesses down to their younger family members. This is especially true when the business has been built up by the same family over many generations. Passing down such a legacy can be a very emotive subject, especially when owners feel passionately that the ethos and values of their particular organisation need to be preserved and passed down.
Planning for the future
While succession planning may not be something business owners want to think about, having a plan, and starting to plan early, is vital in ensuring a successful handover of the business. This is especially true if the plan is to hand the reigns over to a family member.
Although the idea of an automatic right of succession for children taking over the business is perhaps slightly outdated, if family members do show the interest and talent needed to take over a family business then it is important to have adequate time to nurture this.
Conversely, if there is no family member who wishes to carry on the business, then finding the right successor from outside the family also needs careful planning. Many business owners would agree that it is not necessarily handing the business over to a relative that is vital to them, but to someone who shares their passion, values and hopes for the business. Someone who will be able to put in the time and dedication to help it thrive in the future.
Getting the timings right
In those situations where there is a potential family member to take over running the business, it can be a careful balancing act to bring them in. Parents are often reluctant to put undue pressure on their children to join the business. Equally, they are also generally keen for them to not assume they will inherit any business if they do not have the talent or interest to nurture it going forward.
Having to walk the line between gently encouraging interest and also allowing children to develop their own passions and skills can be a challenge. However, encouraging internships and work experience both within and outside of the family business from a young age will be of benefit to the child regardless of whether they eventually take over the family business or not.
Indeed, even if a child does show an interest in joining the family business, there is an argument that it is beneficial to first gain experience outside of the organisation, which they can then use to help grow the family firm.
Whatever situation business owners find themselves in, whether they have a younger family member keen to fill their shoes when the time is right or not, it is vital to have a succession plan in place in order to ensure the future of the business.