Family Business Advice 101: Tips For Transitioning Power To The Next Generation

It’s finally happening.  Maybe you’re ready to retire and enjoy your golden years, or perhaps you’re finally ready to hand over control to the next generation.  Either way, after years of success you’re ready to hand over the family business to the next generation.  It can be difficult to step down after decades of doing things your way, but this is something you’ve been planning on doing since your first day of business. 

Giving someone else control of your business can be stressful regardless of if you’re related or not, and some find that it’s more difficult to give up control of a family business than any other kind.  Charles Bouri and Prudence MacLeod were able to take over the family business without any problems, but that’s probably because their parents did a good job of transitioning over control.  If you’re going to be stepping down from the family business soon, make sure that you follow these tips to ensure that everything goes smoothly.

Know that things will change

When some family business owners hand over control to the next generation, they’re surprised and even a little offended when they see their children, nieces, and nephews making changes to their business.  No one you put in charge of your business is going to run things the exact same way you did, and if you want your business to succeed you wouldn’t want that way.  Businesses need to evolve with their markets, and a business that stays the same each and every year is eventually going to fall out of public favor.  Embrace the change, and be happy that the new owners are excited to be making a change.

Talk about it frequently

If you want the transition of power to go by smoothly, you need to talk about it with your family members, and talk about it often.  Honest conversations about your plans are crucial for ensuring that your employees and family members know what they need to know about the upcoming transition.  While we’re on the topic of honest conversation, we should move on to the next topic…

Be ready to defend your successor

Maybe your cousin always envisioned that they would be the one to take over the family business instead of your son.  Maybe your life partner doesn’t understand why you’re choosing one child over the other.  Either way there are going to be some people that are going to be surprised by your choice of leadership, and they’re going to demand answers about why you chose who you chose.  You don’t need to go into in-depth detail about your decisions; you just need to be prepared to answer people when they start asking questions.  A simple statement about the good qualities of your successor (good business sense, spotless work record, enthusiasm, new ideas, etc) should be enough to explain your choice.