Get Smart With Succession Planning Alternatives
Growing your business to the point where you can pass it on to your son or daughter is a huge and generous gift. And quite often children are eager to take the reins from their parents—but not always. So what do you do if the family business is just not the right fit, and your children decline your offer? We have tips to help with succession planning—including how to respond if your kids aren’t interested and where to head next.
What to do when they say, “No thanks.”
As the person who worked so hard to build your business, it can be difficult to understand why your offspring wouldn’t want to accept the passing of the torch. But sometimes it just isn’t a good fit. For example, your son or daughter may have gone off to college to study agribusiness and decided they’d rather put their degree to work in some other part of the industry instead of back on your family farm. While taking over the business may have been a “given” in the past, just as the way we do business has changed, so have ideas regarding succession planning. If your child doesn’t want to take over, it’s important—for both your business and your relationship—to accept their decision instead of encouraging them to head down a path they aren’t interested in following.
Searching for another successor.
Deciding where to look next could be determined by a variety of factors, including whether you’d like to stay involved or hold a financial stake in the company—or both. And whether you should choose an internal or external candidate requires assessing the skills and leadership abilities a potential internal successor may have versus what your business will require down the road. Check out our recent post on avoiding common succession planning mistakes for more details.
Finding a third-party buyer.
For some businesses, finding a third-party buyer makes more succession planning sense than promoting from within or hiring a new leader. But be aware that it may also take more effort than passing it on to a family member would. Selling your business will likely require getting your financial information in order a couple of years in advance to help ensure that your revenue isn’t being decreased by nonbusiness expenses such as personal vehicles. To this end, you may need to hire an expert to help get your business ready to sell so that you can attract the kind of buyer who’ll see its value and be willing to pay for it.
Does your business have a succession plan? Let us help you think it through.
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