The National Federation of Independent Businesses (NFIB), Washington, D.C., offered its members some interesting ideas on succession planning on its Web site at www.nfib.org. According to Vicki Gerson, when you own a family business, the natural assumption is that one day your children or another family member will take over. But don't expect them to just walk in and take over when you're ready to retire.
The process of handing down the family business is a long one, and how well you do it will determine the future success of your business. She says all owners of family businesses should keep in mind these key pointers:
Ask yourself if he or she really wants the business
Is your child coming into the family business because he or she can't decide on a career? Is the young adult entering the business because he or she failed out of college? Have they had trouble finding or keeping another job? Is your son or daughter feeling pressured to come into the business?
If you answer yes to any of these four questions, reconsider whether it is a good idea for your child to enter the business. The younger generation should only join the family business because they want to — not because there is no other choice. In addition, they should have something to offer the business.
Allow your children to get to know the business
The earlier you can familiarize your children with the business the better. When your children are old enough to have summer or after-school jobs, encourage them to work at your business. This allows them to see how your company is run and gives them a chance to get to know your employees. Once again, if your child would rather gain work experience outside the family business, don't insist that they come to work for you. You're better off with employees who really want the job, family members or not.
Define their job duties
Whether they are working in the business full or part time, specifically decide what roles your children will play in the company. Make sure you monitor their job progress the same as you would your other employees. Realize that they will make mistakes and don't be harder on them than you would be on your other employees.
Don't spend your days looking over their shoulders
Your children must have some power and responsibility or your other employees won't respect them. Find something to do that doesn't interfere with their job responsibilities. You could go out and renew personal relationships with customers or actually find time to golf once a week like you've dreamed of doing. It will also be easier to turn over the business to your heir if you have developed a realistic timetable for the transition.
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