For many family businesses, the goal of handing the enterprise over to the next generation in the future – ideally healthy and in a good position from which to grow – is an important one. In such challenging times, this endeavour may seem harder than ever before, but there are actionable steps that businesses can take to plan for a successful future transition.
Create a Formal Succession Plan
Not having a formal succession plan in place is a common mistake made by many family business owners. However, such plans can have a significant impact on successfully managing major change and transition.
While some business owners may be tempted to put off creating a formal plan, anxious it could cause or exacerbate existing family tensions, addressing this earlier rather than later is nearly always best.
Take Steps Towards Sustainability
Taking steps to make a family business more sustainable is an important part of futureproofing the enterprise to, in time, hand off to the next generation. This process could include setting measurable sustainability targets for the business or ensuring the next generation are equipped with the tools and resources they need to meet climate milestones.
A first step could be measuring the business’s carbon footprint and thinking about ways it could be decreased. Connecting with others who have already achieved this could be a good means of identifying the next steps and best practice.
Get the Next Generation Involved
Succession planning experts like Edgar Paltzer know how important it is to involve the next generation when business owners are in the process of planning for the future. While owners may fear that their potential successors aren’t quite ready, involving them early in the transition process can be hugely beneficial for everyone – including the business. For example, younger generations may have much to offer in the field of digital technology and transformation.
Think About Bringing in Other Stakeholders
Involving a variety of other stakeholders in the process of planning for the business’s future can bring on board new perspectives and boost clarity regarding succession options.
Potential investors can be invaluable in creating a vision for the business’s future and growth, while advisors can help facilitate constructive dialogue where tensions exist to identify a positive way forward. Other stakeholders may, if required, bolster the management team if the next generation currently has gaps in their knowledge or experience.
For more information about business succession planning, take a look at the embedded PDF.