I’ve recently had a number of meetings with very established family businesses.  While discussing their business development plans, I’ve been reminded of some words of caution from my dad given to me several years ago.

I grew up in a family business so I have a special place in my heart for the men and women who have built an enterprise that supports their family as well as the families of their associates and employees.

One of the most difficult decisions any family business entrepreneur faces is when to let go of the reins – and more importantly – who to give them to. When it comes to their children, many of these trailblazers have high hopes that the next generation will take the family business and build it to greater heights. But for every success story, there may well be several heartbreaking ones.

Seeing our children through rose-colored glasses can put all that has been built at risk. It puts employees at risk, customers at risk, and future retirement income at risk. Although unintentionally, it also puts the future of the children taking over the business at risk.

Succession planning is a tricky thing…sort of like changing quaterbacks (ya hear that Green Bay?). The key is to look at the next generation as you would any potential new owner of the business. Do they have the passion, the skills, temperament, and leadership qualities necessary to stick to a plan and take the business to the next level?

Almost every family business entrepreneur I’ve known dreams of the legacy created by passing the mantle to their children. And if they are qualified and have the passion for the job, nobody will take care of the business and its people better than someone with the perspective of having grown up with it.

Turning over a business to a child that doesn’t really want to be in that business – or wants to completely change what that business is all about – is a risky proposition. Every year is a new challenge. Markets change. Customers change. Be sure new owners, partners, and strategic allies fit the culture and the mission of the business no matter what house they grew up in.

Posted by: Steve Banis