“Who Will Take Over From Me?”
Handling the Thorny Issue of Succession Planning
It is only natural to want to eventually pass your business over to your children. Very often here at ISBI we hear the question ‘What if my children are not interested in taking over the family business?’ In response we ask entrepreneurs to consider: That your children may be interested in running a business but in a completely different field; Or that they may not be interested in running any business at all.
In the first case, your children may actually be excellent candidates to own and run a business and they may even want to start a business of their own. But did you as their parent consider that they may be interested in a completely different venture to the one you run? Even though the family business has probably been putting food on their table all their lives (or because of it) they may not want to jump into it. Hearing about it and seeing it so often may have caused fatigue to set in.
The best solution is to set them free. Allow them to ‘do their own thing’ and support them (but not at the cost of your own company). Chances are that there is an actual space in the market for them and they may end up running very successful enterprises. It might also be a chance for you to invest and diversify. If it doesn’t work out for them, they may be more willing to come back into the family business but this time with a lot more experience and readiness to learn. The time away and experience may also make them more appreciative of their parent’s mentorship. It is always better to learn first and to learn by doing.
In the second case, consider what role your child may be willing to play in the business? It would be a pity to force a child who may be a mathematics genius into a completely ‘foreign’ environment where they are not able to self-actualize. They will end up neither enjoying their work nor enjoying their interactions with colleagues. They may have a totally different perspective of their deliverables, for instance, playing with numbers over maintaining customer relations. It all boils down to finding the right balance as both an entrepreneur and a parent/guardian/coach. What would you prefer? Having a healthy relationship with your child or creating a great legacy at the expense of your family relationships?
Many entrepreneurs imagine that if their children are not there, then there will be no one to run the family business after them. The real problem that needs to be solved in this case is the establishment of a business that runs with or without the owner. One that is sustainable and runs with proper strategies, systems and processes. It should have able teams and a management structure that can effectively implement the strategies and processes without you necessarily having to be there.
Once this is in place you can then start to look into succession planning. With such a business getting successors from within the business or from outside investors is less of a challenge. For your children, inheriting an equity stake in an independently functioning business is not the same as inheriting the job of running that business.
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Apart from the common challenge of motivating employees the issue of succession planning is a very real worry for many business owners. At ISBI we interact with entrepreneurs at different levels of these challenges and help them navigate the appropriate solutions. ISBI’s programs are tailor made to guide entrepreneurs to prioritize their goals both as rational investors and meticulous managers.
