Family Business Succession: “One day, it will all be yours” but it won’t come easy
Probably the most dreaded phrase in family business succession planning; at worst a hollow promise to hand over the reins/give up control and transfer ownership, and at best, a hope that it will all magically get sorted.
Smoothly handing over control and ownership of a family-owned business is every family’s dream, but if you look at the Business Succession stories of some of our best-known families you will see tears, drama, court cases and the erosion or loss of business value.
The three-circle model of family business goes part way to explaining the issues which arise when people confuse roles – owner, family member, employee, and in some cases all three – but it doesn’t explain the underlying cause.
Lots of time in Business Succession and Exit planning is spent managing the process – how, but nowhere near enough time is spent upfront understanding the various drivers and goals of the participants – the why.
Step 1 in our 21-step process is all about why – goals and outcomes – why are we transferring control, ownership, income, equity, and what outcomes are we seeking from the succession process we are about to embark on?
I have written before about role-identity fusion and this is significant for family business owners – their identity is intrinsically linked to the business and the owners’ sense of purpose / their contribution to the world and their family is also linked back to the business. Separating the owner from the business is never easy.
In order to get the best result, you need to focus on three key things (apart from remembering that why is just as important as how) –
1. “Begin with the End in Mind”
2. Start as early as possible
3. Get good advice/advisers
See our Family Business Succession Webinar for more.