I want to retire but don't have a clue where to start!Jan 18, 2022
When you say ‘family business’ it conjures up images of personal service, quality and trustworthiness. Cider makers, construction firms, farm shops, funeral directors, hotel owners. Family firms provide hundreds of thousands of jobs to industries around the UK.
So why then, do only 30% of family firms succeed from generation one to generation two? And only 12% make it to generation three and beyond? What’s causing our beloved independent companies to slowly disappear from our local communities?
It’s pretty simple, actually…. Succession planning (or lack of it).
Family businesses are notoriously bad at creating a plan for succession to the next generation. It’s easy to get distracted with the day-to-day firefighting that comes with running your own company and not stop to think about what will happen when you want to retire and want your kids to take over.
So whether you’re hoping to retire in 1 year or 10 years, it’s never too soon to start your succession plan. Here are 5 easy ways to get started:
1. HOLD A FAMILY MEETING
Choose a day and sit down with your family members, away from the business, to talk solely about the future.
I find it’s a good idea to book a meeting room at a local hotel - somewhere professional but away from the business itself so you can concentrate without any ‘work’ distractions.
It should include family members who work in the business plus any other family who might be affected by plans for the future (i.e partners).
2. KEEP IT PROFESSIONAL
Your family meeting should be treated just like any other business meeting. Plan an agenda, nominate a Chair, make sure everyone turns up on time, turn phones off and focus on the purpose of the meeting.
It’s so easy for family meetings like this to either become too casual and laid back (and you don’t achieve anything except having a nice lunch) or for things to get heated and descend into a family argument.
Make sure the day is productive and takes you one step closer to creating a plan.
3. BE HONEST WITH YOURSELF (AND EVERYONE ELSE)
Now is the time to tell everyone what you want from life. No holds barred. What makes you happy? Where do you want to be in 5 or 10 years time? What are you struggling with right now?
If you’re not 100% truthful then a plan will be made involving your future and you’ll come unstuck further down the line. It’s so hard in a family business because you don’t want to hurt anyone’s feelings, especially your kids.
But if you're worried your kids don't have what it takes, or your scared about not having a reason to get our of bed in the morning, or you're anxious the business will fall apart without you around, then now is the time to say.
4. START MAKING A PLAN
Don’t leave that meeting without making some sort of plan for next steps. What needs to happen for you all to work towards the day of succession? Write new job descriptions, start a mentorship programme, go on a leadership course, create a timeline…
Whatever needs to happen needs to be written down in a plan and assigned to individuals. Everyone has to be held accountable to what they promised to do. Otherwise it just won’t happen, trust me!
5. COMMIT TO REGULAR, SUCCESSION PLANNING MEETINGS
No matter how busy life gets for everyone, it’s crucial that you make these meetings a regular thing. Even if it’s just once a month.
A time to focus exclusively on the succession plan and making it happen. Put dates in the diary and stick to them. If you don't, momentum will soon die out and you’ll be in exactly the same position in 12 months time.
TO SUM IT UP...
For many business owners, succession planning feels like an expensive, laborious process. Something that needs to be done behind closed doors in case employees or clients find out that things might be changing.
But the truth is, it doesn’t have to cost you anything except your time and energy. In fact, lots of family firms make the transition to the next generation into a positive and energising time for the whole company.
A reason to refresh, rebrand and look towards the future with a new leader at the helm.
Want to chat with me? I'm always on hand for some friendly (free) advice. I've been helping families with succession planning for nearly 15 years so there's isn't anything I haven't seen. Call/text me on 07590 830 001 or email me - [email protected]
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