In working with family businesses over the years, I have certainly seen an array of challenges and successes. Of the barriers that frequently delay a family business from planning and executing their transition, one of the biggest I see is a lack of clarity on a current owner’s next chapter of life. So why is this so common?
I think it has a lot to do with how personal in nature this item is to a business owner – particularly a first-generation founder. In many ways, the family business becomes an extension of your family that requires constant nurturing and attention. Give it the support it needs early on, and it has the real potential to thrive. Ignore it and well, much like actual children, it can grow unwieldy and find itself in trouble.
Because of this dynamic, I think many family business owners struggle with a certain level and form of separation anxiety. The prospect of stepping away from something you have spent so many years building and attending to, both through good times and times of struggle, is so incredibly hard to do. As I’m getting ready to drop my oldest child off to college in less than two weeks, I think I am really starting to understand what that feeling is like.
As a rational person, you know that there is a real possibly that a day will come when you may want to start stepping away from the business (or in some cases are forced to) but it’s very challenging to picture how you would go about filling your day. From my work with family business owners, the ones who seem to do the best have spent time gaining some clarity on this matter. Some choose to spend time with other owners, whether in peer groups or with acquaintances, while others have sought council from advisors. My experience has shown me that the owners who put the time into envisioning how they will spend their days after they exit the business (and even practice it from time-to-time before that day comes) seemed to have the easiest time transitioning – both on themselves and on their successors.
Regardless of what stage your family business is in, it is crucial to begin having regular discussions about succession planning. This will prevent common barriers, such as lack of clarity on your next chapter in life, from getting in the way of your family business transition.
If you would like to discuss how you can avoid common barriers to your family business transition, please contact us.
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