At AdviCoach, we frequently hear, \u201cI know I need a succession plan, but I don\u2019t know when or where to start.\u201d Succession planning is critical to family-owned businesses, and yet it continues to stump even the savviest of business owners. If you\u2019re in a similar situation, we hope this post will answer some fundamental questions and give you the motivation you need to get started.<\/p>\n
While each family business is unique, there is a common thread: Often, the business owner has been at it for years and they\u2019re still full of energy and have no intention of stepping away anytime soon. They\u2019ve spent decades steadily growing their family business, increasing the company\u2019s customer base, expanding to new regions, and building a brand. The business owner has dedicated their life to building the business and they hope to pass it on to their children one day.<\/p>\n
As the business owner approaches their 60s or 70s, the kids start to ask questions: \u201cWhen are you going to exit? Who\u2019s going to take over the family business? Which one of us is most qualified to take the reins?\u201d The kids want to know about the future of the business, and rightfully so. They want to understand their parents\u2019 vision, their retirement plans, and know what they should be doing to ready themselves for the big transition.<\/p>\n
In multi-generational businesses, it\u2019s not uncommon for the second-generation leader to have to step into their parent\u2019s role at a young age following a sudden life-changing event. Now that their own children are asking questions, they don\u2019t want their kids to struggle with the same challenges. The owner doesn\u2019t want to create a disadvantage for their children by not preparing them, but at the same time they aren\u2019t comfortable thinking about their exit.<\/p>\n
The owner says to themselves, \u201cI still have a lot of years left and besides, the kids are nowhere near being ready to take over.\u201d But, the children have heard horror stories for years about the trials their parent faced when they had to unexpectedly take over the company. The children are wise and don\u2019t want history to repeat itself.<\/p>\n
To the parents in these scenarios, they may feel pressured. They may ask their kids, \u201cWhat\u2019s your hurry? I\u2019m not ready to retire.\u201d In theory, succession planning is somewhat like creating an estate plan \u2013 and people are in the habit of putting off both. Business owners know they need \u201ca plan,\u201d but they hesitate because they don\u2019t want to contemplate their exit, or they\u2019re afraid to \u201copen that can of worms.\u201d<\/p>\n
Business owners will argue that the day-to-day business operations get in the way of succession planning, but in reality, time can be the easiest obstacle to overcome, especially with the help of a business coach. In the vast majority of cases, the real hurdle lies in the mindset that it\u2019s too complicated.<\/p>\n
The following are the three biggest challenges with succession planning.\u00a0<\/strong><\/p>\n 1. Next-Generation Preparedness<\/strong><\/p>\n As the business owner grows the company, the business becomes more complex than it was when he or she started. As a result, the owner feels their children are not ready to take the reins. Since the next generation would be stepping into bigger shoes, the owner questions the children\u2019s ability to handle the task. On the other hand, the younger generation urges their parents to create a succession plan that will prepare them and ensure next generation success.<\/p>\n 2. The Family\u2019s Expectations<\/strong><\/p>\n With all family businesses, the leading and successor generation have their own ideas and expectations about how the future generation will handle the family business. But, are the generations on the same page? Are they even close? These expectations include career opportunities, how they will be cultivated, who will take over the family business, and under what terms will ownership be transferred. Many owners avoid these conversations because they sense the misalignment in views and <\/em>expectations.<\/p>\n 3. The Leader\u2019s Vague Vision<\/strong><\/p>\n A lot of business owners extract a great deal of enjoyment from their business \u2013 it\u2019s more than an income-generating mechanism \u2013 it\u2019s also a social outlet. The business is personally fulfilling, so they avoid contemplating their exit. This can be why founders have such difficulty with succession planning. Any business owner can put up resistance unless they have firmly in place, a compelling vision for their business beyond their exit.<\/p>\n If you\u2019ve hit your own roadblocks to succession planning, whether they\u2019re real or subjective, they can be resolved by executing a series of strategic steps and changes that will prepare you, your family, and the business for the next generation of leaders.<\/p>\n AdviCoach can help you\u00a0<\/em>determine the \u201cwhat, when and why,\u201d and definitively answer the question, \u201cIf I am to retire in X amount of years, what needs to happen so I can successfully pass the business to my kids?\u201d Our advice is to let a business coach help you break down the barriers to succession planning once and for all \u2013 you deserve the peace of mind!<\/p>\n","protected":false},"excerpt":{"rendered":" At AdviCoach, we frequently hear, \u201cI know I need a succession plan, but I don\u2019t know when or where to start.\u201d Succession planning is critical to family-owned businesses, and yet it continues to stump even the savviest of business owners. If you\u2019re in a similar situation, we hope this post will answer some fundamental questions…<\/p>\n","protected":false},"author":10,"featured_media":485,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,8,14,9],"tags":[],"class_list":["post-484","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-growth","category-leadership","category-success","category-team"],"aioseo_notices":[],"featured_image_src":"https:\/\/advicoach.com\/va\/wp-content\/uploads\/sites\/7\/2018\/06\/0416.AdviCoach-June.jpg","featured_image_src_square":"https:\/\/advicoach.com\/va\/wp-content\/uploads\/sites\/7\/2018\/06\/0416.AdviCoach-June.jpg","author_info":{"display_name":"tforehand","author_link":"https:\/\/advicoach.com\/va\/author\/va\/"},"_links":{"self":[{"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/posts\/484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/comments?post=484"}],"version-history":[{"count":0,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/posts\/484\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/media\/485"}],"wp:attachment":[{"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/media?parent=484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/categories?post=484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/tags?post=484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}