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How to prepare children to one day take over your business

On Behalf of | Mar 8, 2018 | Blog |

You started a business to be your own boss and to one day give your children an opportunity to take it over. It is important to remember that passing a company from one generation to the next is a process, not an event. You need to prepare them adequately, or you will find yourself among nearly two-thirds of family-owned businesses that do not last between the transition from first to second generation. 

When you first develop your business plan, it should contain some details for how you want business succession to occur. This gives you plenty of time to plan your future and the future of your child. 

Present the business as an option

You do not want to force a child who has no interest in taking over your business into your line of work. This is a recipe for disaster. Your child will be unhappy, and everything you worked for may fall apart. Instead, when your child is 15 or 16 years old, you should present it as an option. State that you would like it if your child took over the family business, but if he or she has other plans, then be supportive. This gives your child plenty of time to think about it and decide what to do after graduating high school.

Let your child branch out

Some outside experience can give your child essential experience to figure out what to do. It may be for the best to spend a few years after college with another company. That way if he or she decides to come back to the family business, valuable skills and experiences can be brought back to the position. 

Talk about important decisions as a family

Open communication is the way to go, especially if you have several children. Two of them may one day want to run the business, and you want to plan accordingly so that there is no ill will. Make sure everyone has a chance to voice an opinion. These meetings allow for everyone to remain on the same page, so even if someone does not get exactly what he or she wants, the person at least feels part of the conversation.