Do you own a business that you’d like your children to run one day but just haven’t put a transition plan in writing? If so, you are not alone. According to a recent survey of 230 family business leaders in Mexico, Canada, and the U.S., you are in the 66% of owners who have not yet created the type of plan necessary to orchestrate a family business transition to the second generation.
Business Continuity vs. Succession Plans
Many owners tell us that they have business continuity plans in place to protect their businesses from events beyond their control, like death and disability. That’s great, but as the survey indicates, very few have long-term succession plans (or what we call business transition plans) that put them in control of choosing and preparing successors without damaging their important relationships. In other words, few owners have written plans that control what happens to their businesses while they are alive and active.
Talking About Family Business Transition to the Second Generation
Some owners tell us that they haven’t put their business transition plans in writing, but they have talked to their children about their wishes. In response, we quote the playwright George Bernard Shaw, “The single biggest problem in communication is the illusion that it has taken place.”
Talking with your children about what you’d like to see happen to your company is not the same as creating a written business transition plan. A transition plan gives you clarity about your goals, instills confidence in your successor, and increases exponentially the odds of a successful transition. Unless a transition plan is documented and clearly communicated to children and others at the appropriate time, companies can end up in the hands of successors unprepared to lead them, and family relationships can be irreparably damaged.
Transition Planning Is for Life!
When we work with owners to create family business transition plans to the second generation or transition plans in general, we begin by asking owners to set and describe their goals for themselves, their successors, companies, and families.
The more time you give yourself to create and execute your business transition plan the more options you have when (not if) circumstances change. But, if you aren’t quite ready to begin business transition planning and don’t have a written business continuity plan in place to control what happens to your company should you die or become disabled, we urge you to protect your family and your company today. Call us and let’s start work on a business transition plan that achieves your most important goals, puts in place a successor prepared to build on your company’s success, and launches you into your Next Adventure™!
Elizabeth Ledoux is a co-author of the award-winning It’s A Journey: The MUST-HAVE Roadmap to Successful Succession Planning, as well as Accelerate Your Entrepreneurial Flight and Understanding the Growth of the Entrepreneur. She frequently speaks to organizations and business owners about challenges and opportunities in private and family business transitions, business and individual growth, and the business succession journey.