Many people toil all their lives and establish businesses with hopes of giving their kids, generations after, a good life. However, deep business roots aren’t always a guarantee for success. The successor must pass down the entrepreneurship drive supported by progressive development and adaptation to sustain the business. How do you successfully pass down the family business baton? Read on to learn how.
1. Expose The Next Generation To Business Early
According to Cornwell University, SC Johnson College College of Business, a family-owned business lasts about 24 years. Additionally, only about 40% of such enterprises transition into second-generation businesses. To ensure your business grows for years on end, you should bring your children on board early enough to familiarize themselves with the ins and outs of daily management. They’ll experience firsthand the hard work you must put in to make the business successful. They don’t have to do the hard work; simply being present and observing is enough.
You’ll be amazed by how much they can learn through observation. They might grab critical lessons such as understanding what steps to take to minimize costs while being environmentally friendly, a must-know secret for business survival. About 90% of companies fail to track printing costs. As a result, they miss out on impactful savings affiliated with print costs and environmental management. Exposing your successors early to these critical lessons prevents them from making these mistakes.
2. Establish Solid Systems
Businesses that survive longer have systems that everyone must follow faithfully to ensure quality and standardized output throughout generations. For this to happen, the family must know how to balance codified processes and standard operating procedures. An excellent example is going the extra mile to provide after-sales services. Independent auto repair shops do about 75% of after-market repairs. The main benefits of offering aftersale services are retaining customers and growing your market share.
If you intend to pass over a successful business, you must be willing to source talent outside the family. Doing so ensures you maximize professionalism to sustain your family business for generations. Specialized skills alongside business-minded successors ensure business survival after your exit.
3. Create Progressive Development Processes
Moving your family members through the diverse organizational departments would be best for learning different business processes. The idea is to help them develop technical expertise in diversified business areas and allow them to manage diversified teams. As a result, the successors will learn the scope of the business while gaining the necessary experience in overall business management. Also, they’ll learn how to keep a competitive advantage against direct business competitors and protect the business against attacks that spell doom to a company, such as data breaches. Data breaches exposed over four billion records in the first half of 2019.
4. Insist On Integrity
It’s common for some family members to develop bad habits. If your child fudges the truth at home, they may do the same in a company. Also, if one of your kids always trounces the others in typical rivalry during play, chances are they may bring unhealthy competition into the company. Therefore, parents shouldn’t ignore these behaviors. Address them early to prevent these negative inclinations, which can potentially damage the family business in the future.
Not all family businesses make it through multiple generations. For this reason, if you intend to pass over the family business baton to the next generation successfully, you should expose the successors to the business early and create progressive development systems. Instill integrity and ensure it runs in the blood. Your lineage will enjoy the fruits of your hard work long after you are gone.