Preparing the next generation to take over the business
Succession planning isn’t a topic exclusively reserved for large family-owned businesses.
Succession planning isn’t a topic exclusively reserved for large family-owned businesses. You don’t need a business coach to tell you that it’s equally if not more important for small, local, and independent businesses. As more and more boomers get ready to retire, there is an increasing need to prepare the next generation to take care of their businesses.
Most business owners believe that the transition will be natural because a) their children have assisted in business operations and b) they have never voiced any opposition to it. This passive approach could lead to problematic situations for both parents and their children when it’s time to hand over the reins.
To make it easy for business owners, here are five best practices to help transition the business to the next generation.
1. Know about your children’s plans
The most important part of the transition is knowing what the next generation wants. Are they really interested in the business or were they helping you out of courtesy? Do they have a natural flair for it? Do they want to do something else with their careers? If taking over means a relocation, will they be happy with it?
2. Don’t expect them to know everything
Just because they may have interned there or assisted you doesn’t mean that they’d know everything. What you’ve got to do is ensure that they have a broader view of the business with a focus on revenue generation and client management. For example, they only have to know about your key customers or clients.
3. Get them the right team
You don’t need a business coach to know the importance of the right team. One of the earliest things you can do is to introduce the next generation to your core team both within and outside the business. Other than spending time with you, ensure that your children also learn from them as that would give them an invaluable perspective.
4. Share the company culture
More than anything else, the next generation should inherit the company culture, or simply “the way we do things around here.” They should know the names of your team members, the respect with which you treat them, and the discipline you enforce when needed. It would be excellent if your children can also meet the family members of your core team and spend some time informally with them.
5. Slowly give up control
It isn’t easy taking over the business from one’s parents. There’s tremendous pressure and the expectations can be sky-high. The last thing they want is you looking over their shoulders every step of the way. Let them slowly take charge in their own way.
Most business coaches have seen how challenging it can be when a business goes to the next generation. What’s needed is adequate planning, a support team, and the faith that just like you, they’ll eventually figure out things.