Family Owned & Operated. But For How Long?
America was founded on the key principal of freedom in one's own right to their pursuit of happiness. In most cases, a person simply wants to be able to make a decent living and to build something that they can pass down to those of whom they will leave behind. One fantastic answer to this is to start a business. A family owned and operated business. Though this is often an arduous task filled with many pitfalls, hurdles, and trials to overcome, the potential for growth and long-term prosperity is virtually limitless. When a business is family owned and operated, it inherently has a level of authenticity about it and that translates to trust with the business' potential customers or clients.
This authenticity stems from the fact that when a business is family owned and operated, there's a human touch to the business transactions and interactions with the sales process. This is often due to the simple fact that "family owned" are most often smaller businesses line their business model up with the ethics and beliefs of the small business owner. This belief system and the ethics that follow with it resonate with the clients or customers and is shown clearly in the quality control of the process, product, or services provided.
As many parents will find, a child's dreams don't often follow suit with their own. In many cases, a family owned and operated business may one day become simply "family owned". As the child may not want to dedicate their life to the profession that their parent(s) developed to make their business successful. This doesn't mean that building a family business is doomed to fail or fall by the wayside once the founder is at a stage in their life when they will decide to step down from a direct leadership position. As children enter into their adulthood, they often have the need to forge their own path ahead and create something on their own. This does not mean that your business will necessarily come to an end either. After all you've put in countless hours of work to create something that will survive you and your spouse so that your children, wherever they may be, will have something continuing to provide for them and their children.
Creating The Foundation Of Succession For Your Children
This article is not meant to tell you how to build a successful business. The purpose of this article is to help you better understand how and when you can step away from a leadership role in your business or pass it along to your children or chosen successor. The idea of stepping away from the helm of a business that you built from the ground up can certainly seem like a daunting and potentially, dooming task for your business. These thoughts and feelings are completely natural for the founder of any business to experience. However, there are many ways in which you can begin to gradually and systematically take steps back and set the continuation of success for all that you've built.
Some common examples of steps that can ultimately help ensure that a smooth transition takes place as you begin to step away from a direct leadership role for your business.
Analyze Your Business Model & Its Needs
The first step in solving virtually any type of problem or puzzle, is simply to analyze the situation. Gaining a clear understanding of not only the needs of something, but also the environment in which it exists can only help you better prepare a plan to achieve a specific goal.
2. Create An Accurate List Or Portrayal Of Your Direct Involvement For Daily Operations
3. Develop A Process That Replicates "You"
4. Train Your Replacement
5. Guide From A Distance
How To Hand The Company Over To Your Successor
While you may now have a better understanding of just what needs to be done to replace your level of involvement in the workplace, you may now be wondering how this relates to passing the benefits of what you've built onto your children or other family members. This process often relies on pre-built succession steps written into official corporate documents. Depending on the size of your company or business, you may or may not have a legal department that can draw these document up for you. In many cases for small businesses, this process is relatively smooth as they're not likely to be publicly traded businesses or corporations. However, in the event that the business you spent your life building hits its full stride during your lifetime and you've found that you may need to become a publicly traded company or start looking for and accepting partners, then I highly recommend getting these affairs in order ahead of time. Defining what happens to your authority once you part ways from a leadership position in your business, either from natural causes in life, retirement , or some unforeseen accident will make the transition that much easier for all partied involved.
If you would like to learn more about what you can do to prepare for the growth of your business or would like to work with a Business Development Consultant, simply click the link below to book your free discovery call with Budd Consolidated!
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