How much time did you spend developing a plan to launch your business? Did you consider all the ways to market, leverage and grow your business from the ground up? Did you assess the risks and develop plans for multiple scenarios? I’m willing to bet you did.
Now, how much time have you spent developing a succession plan?
What would happen to your company if you disappeared tomorrow—and keep this reality in mind: almost half of family-business closures are a direct result of the founder’s often unexpected death. Planning for the inevitable is the key to sustaining your family business and continuing the legacy that was started.
These types of contingency plans are critical to the continuation of the family business despite the inevitable circumstances may come. Research shows that families whom have developed a long-term plan with definitive goals manage the challenge of generational transition with much greater success. To do this, 1) Have a plan, 2) Define the parameters, and 3) Don’t leave anything up to chance.
1) Have a plan:
One third of family-owned businesses have a seamless succession to the next generation. In order to be in the successful percentage, plan ahead to alleviate any future family squabbles that would inhibit the business from moving forward.
2) Define the parameters:
Set clear guidelines as to what is expected of your successor and enable him or her to assume some of the responsibilities you face in your current role. What are the experience/educational requirements for family members to join the business? Keep your management in the loop and define their roles under new leadership.
3) Don’t leave anything up to chance:
Just like when you developed a business plan, you need to develop an in-depth exit strategy to give your business and family the best chance at a successful leadership transition.
One of the most valuable parts of being involved with the Family Business Council’s an open forum to discuss common issues in owning your own business. Consultants are expensive, so save some money and consider becoming a member of FBC to learn from experienced owners that know and live the issues you are facing. The only way to get answers is to ask questions, so feel free to inquire right here!