Summary: You may be thinking of how you pass along your business to family. Before making any moves – create your plan.
In our business, one of the thoughts that may enter our mind is “Who will take over my business/clients when I retire?” or “Who can help me grow my business?” One of the answers you may come up with is “family!” After all they know you, know the business and wouldn’t they love to take over!
This sounds great doesn’t it – get everyone involved. It is a good idea and in order for it to succeed – you will need a plan. Some people call it a succession plan (as in, who will succeed you) and others will call it an exit plan (as in, how are you going to walk out the door and not look back). Call it either one, you will notice they both contain the word “plan” so you cannot just hand over the keys to a family member.
What to consider in the plan:
Training. How will they learn about the business itself? I am an advocate of being in and responsible for each position in the company. Depending on who this is, will determine how long they need to spend in each position.
Knowledge. This is business and industry knowledge. How will they learn about running a business and keep tabs on what is occurring in the industry. If a person comes from outside of the industry, this may take a while.
Experience. Or you can call this transition time. How will they gain the hands-on experience but still have you around for support and back-up.
Investment. This can be the most sensitive topic – will they need to buy into the business or earn “sweat equity” or a variation. Deal with this up front to avoid having different expectations. You don’t want a family broken up over this.
Formalize it. Yes its family and right now both sides trust each other. Keep it that way, formalize it in writing. This way down the road there is no “I thought you said….” or “My intention was….”. This is a serious subject and should be treated as such.
This may look like a lot of work now but those years down road when you are planning on walking out that door – not only will you feel confident you have left your company, clients, and employees in good hands…you will be proud of the legacy you were able to pass onto your family.