Some family business experts say that a family business should never be passed down to the hands of the children. They argue that the children are never as motivated or successful as the founder. However, in the UK at least, 76 percent of private firms are family owned and provide many examples of success and profit after a succession.
Accompanying simply the fears owners may have for the future of their business when they pass down the company are also a set psychological and cultural torments to make it more difficult – fear of death, dealing with old age and retirement, reluctance to let go of power, and family taboos of who to pass the company down to, favoring one child, etc.
Succession plans are most successful if mutual respect and responsibility has been developed between owner and successor and a partnership and commitment is already present. Owners looking to pass down to their children should particularly take responsibility in the following areas:
- Ensuring beforehand their children have received a broad, well-based education
- That they are nurtured and have developed adequate self-esteem
- That they learn about financial management, risk management, crisis management and leadership development
- That they have outside work experience before entering the family business
- They have the leadership qualities required to “run the show”
- And, once they have entered the business, they have an in-house training program that is relevant and prepares them for the responsibilities to come
It is not enough to simply pay lip service to above, or simply assume children are getting what they need. To ensure the future of the business and your child as a successor, attention to the success of the child himself is an important step, or series of steps, to take. They will never be you, rather, help them develop into the best they can be by giving them the tools, platform and most of all – your time and energy.
