Whether you want it or not, there will come a point in the life of your business that you should begin the process of turning it over to someone else. Sure, no one wants to think about leaving the company that they have created, but failure to doing this will not only be costly to you, but to your family and employees as well because this can lead to damaging outcomes.
The good news is there are a lot of exit strategies you can do to avoid this from happening and one thing is to transfer it to your children or other family members. No matter the age of your children is, now is the best time to start thinking a business strategy to implement a successful transition plan. When it comes to business, it’s never too early or too late to begin. But be warned: According to experts, only 10 percent of family businesses survive to the second generation and even fewer to the next. The main reason why this happens is because of lack of planning. Though it may be tough, it is still possible to survive in the business industry and be part of those 10 percent, as long as you properly train your successors.
If you are a current business owner, this guide will help you create a successful succession planning:
Expose them to the family business at an early age.
Exposing your child to your company at an early age is healthy. That way your child will be able to make an informed decision early on in life whether he or she wants to work in there. Teach them about the business and share the history of the family business. Take your kids to several meetings or dinners with executive team to give them ideas on what’s going on. However, don’t force them to join if they don’t feel working for the family. Remember, children have their own plans and desires. It’s still important to let your children do what they want, even if it’s taking a different path.
Encourage them to work in another business.
Letting your kids to go on their own way is crucial. If they work outside your business, they will be able to learn more quickly, grow more effectively, and gain more self-confidence. And it will even give them more knowledge to develop a plan that will benefit your business later on. One good rule of a thumb is to not let your kids think that they have a family business to go into, because it will give them an excuse to not pursue anything else. You have to let them prove themselves first before taking over the business.
Teach them the fundamental aspects of business.
A lot of young successors want to start at the top position without any knowledge of the business, which leads to failure. Before you let your kids take over your company, you must train them first and expose them to multiple facets of your business, including managing, purchasing, sales and marketing, operations, customer service, and financial planning. Whatever the size of the business, the president, the leader, or the owner may be required to personally perform a certain task, even if it’s a small task, such as sending packages or outsourcing payroll services to maintain the business. Even small tasks are essential to successfully running a business.
Don’t push them to be your successor.
Not every kid is going to be enthusiastic about taking over a family business, no matter how successful the business is. It’s natural. And as a business owner, you should know and be prepared about it. In this situation, the best thing to do is to appoint someone to take over your place for a while. Then, gradually train your kids until they become comfortable with the responsibilities.
When they’re ready, move on.
Perhaps, the hardest part in the succession process is the final step wherein you need to finally pass the baton. Sometimes, business owners are having a hard time to let go after so many years of leading the company. But you need to be ready to step back and allow your successor to run the company on his or her own.