Running a family business is a cumbersome, yet infinitely rewarding task that will, sooner or later, fall upon your children, and your children’s children. While the process of letting go and giving your business away to someone else is in itself difficult for obvious emotional reasons, the problem of ensuring the steady growth and solvency of your family business might prove to be even more challenging.
After all, the next in line for the throne should be well-equipped to take over your loyal clientele, offer the same if not a better level of service, and take your brand to new heights in the digital world. Here is how you can prepare the next generation to take over your family business and pave the road to years of success and solvency.
Encourage early involvement
The best heirs are groomed for the throne from a very early age. That said, there is a fine line between influencing the next generation to become part of your business, and controlling or worse, forcing them to join your company. Ultimately, the decision will fall on your successors, but that doesn’t mean that you cannot inspire them to want to take over your company when you decide to retire.
The key to achieving this might lie in early involvement. By simply giving them certain tasks and responsibilities such as managing your schedule, communicating with your clients, or brainstorming ways to make your processes more efficient, you’re actively involving your successors into the daily processes of the company and allowing them to form an emotional bond with your business.
Unite the next generation under a single vision
The prospect of monetary stability or even wealth holds little power over the millennial generation, as nowadays aspiring individuals are more concerned about having a fulfilling job than one that comes with a 401k plan. The reason is simple: people in the 21st century work for their happiness and long-term progress, and not so much for the paycheck.
What does this means for you? Quite simply, it means that in order to inspire your successors to take the job seriously, you need to impart onto them your vision, your company’s culture, and why it truly matters in the world. By sharing your brand values with the next generation, you can easily help them connect with your company on a more emotional plane, transcending the material and solidifying their involvement in the company under the wings of a shared vision.
Provide the tools for cash flow management
Without a doubt, the most important element of a successful business is ensuring a positive revenue stream. You might have been able to manage the cash flow of your company over the years, but that doesn’t mean that your successors will be as financially-savvy, or prudent with the company’s finances. This is why it’s imperative to provide them with the tools to keep the proverbial ship afloat no matter what.
To ensure constant cash flow and meet your immediate cash needs, it’s important to teach your successors about debtor finance and the potential it holds for the growth of your company. The simple truth is that clients and customers will always find a way to delay payments and prolong the payment process, effectively impairing your cash flow and day-to-day operations. Instead of chasing them around the ruining your relationship, your successors should take a more subtle approach and have a factoring company release the needed assets immediately. It’s an effective cash-flow-management trick not many new business leaders are aware of, but should include into their growth strategy.
Provide adequate education
Given the fact that the fate of your business literally rests in the hands of your successors, the best thing you can do to ensure it continues to thrive is to educate them on the proper management, organization, governance, ownership of a successful company. You can achieve this by offering internship programs at your company during the summer.
The internship program can be divided into theory and practice. In the “classroom”, your successors can obtain all of the relevant theoretical knowledge needed to run a company from an HR, financial, and management standpoint. In practice, you can teach them how to handle the daily operations in your company, and build their own professional network that will one day become the driving force behind innovation and growth.
Don’t stifle innovation
Last but not least, there is a need to come to terms with the fact that you will no longer be in charge, and that you should let your successors take the company in a new direction. Innovation is the driving force behind the growth and success of every modern business, so don’t expect the new management to retain the same old business model, but rather encourage innovation at every turn.
With a sound vision for the company and a comprehensive strategy that will turn that vision into reality, there is nothing stopping the new management team from paving the road to even greater heights of success for your business. The only thing you can do is to prepare them for the cumbersome task that awaits.
Stepping down as the leader of a family business is never an easy thing to do, and for numerous obvious reasons. While it might be inevitable, it doesn’t mean that you cannot set the stage for your successors, and help them build the success your company deserves.
Author: Oliver Curtis
Hi there. I’m Oliver. I’m just a young boy from the outskirts of… Okay, that’s a lie, I’m not a young boy anymore, although I certainly feel that way at heart.