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Are Your Kids Good Enough to Run Your Business?
August 27, 2007
The vast majority of family businesses do not have written succession plans at all—If you hope someday to pass your business on to your kids, you should start making plans now. Here’s how to prepare yourself—and your children—for the transition.
- Get a list of potential candidates together.
- Do you have potential candidates in mind? Your kids?
- If your children aren’t management material you’ll need to separate management from ownership. Possibly consider hiring a board of advisors, therefore ownership is still in the family but the day to day affairs are in the hands of trusted managers.
- Prepare your candidates for succession.
- Encourage them to get college degrees.
- Assign your kin a non-management position in your company or have them work for a competitor to get a better feel for the industry. This will build their knowledge of the business and their credibility with other employees, who may otherwise dismiss a successor as the boss' kid
- Arrange for your future’s financial needs.
- You need to ready yourself, emotionally and financially. You should try and create financial independence outside the business
- Determine your role after succession.
- How involved do you want to be during the transition phase when your role will be assumed by the new leadership?
- Are you to be compensated and how will this impact other employees’ compensation
- Get professional help.
- Even if you would never use an outside adviser for any other decision, consider the value that an experienced professional can bring to this important event.
Posted by Shanu Singh Guliani on August 27, 2007 | Comments (0)
