{"id":2125,"date":"2017-03-06T10:46:56","date_gmt":"2017-03-06T10:46:56","guid":{"rendered":"https:\/\/www.goodmanjones.com\/blog\/?p=2125"},"modified":"2017-02-16T15:58:40","modified_gmt":"2018-09-26T10:46:24","slug":"nurturing-next-generation-family-business","status":"publish","type":"post","link":"https:\/\/www.goodmanjones.com\/blog\/nurturing-next-generation-family-business\/","title":{"rendered":"Nurturing the next generation in a family business"},"content":{"rendered":"

Running a family business<\/a> isn\u2019t only about making money. The owners of course want to maintain and grow the family wealth; but they often want to build a business that can be passed on to future generations.\u00a0\"Portrait<\/p>\n

This can be easier said than done, however. According to the Family Firm Institute, less than a third of family businesses survive into the second generation. Just 12% make it to the third, and just 3% reach the fourth generation or beyond.<\/p>\n

As the saying goes, \u2018the first generation builds the business, the second makes it a success, and the third wrecks it\u2019.<\/p>\n

Succession planning<\/h2>\n

Effective succession planning is crucial to the longevity of a family business. But it can also be one of the most highly charged issues for owners to deal with.<\/p>\n

And the impact can be devastating when it goes wrong. There\u2019s the potential for litigation, huge legal bills, and critically, a breakdown in family relationships.<\/p>\n

At Goodman Jones, we\u2019ve supported many family businesses through the succession process,<\/a> and know what works \u2013 and what doesn\u2019t.<\/p>\n

Making the hard decisions<\/h2>\n

\"\"<\/p>\n

Which of your sons and daughters are capable of taking over the business \u2013 all of them, one in particular, or none at all? It\u2019s one of the most difficult questions a family business owner can face.<\/p>\n

It takes strength and focus, but you must base your succession strategy solely on appointing the best person (or people) for the job. Whatever your decision, it must be right for the business.<\/p>\n

That may sound impersonal, but remember: what\u2019s best for the company will also be best for your family in the long term.<\/p>\n

So how do you go about choosing the most suitable successor(s)? In our experience, it pays to keep the following in mind:<\/p>\n

\u2022 Look forward. What skills and aptitudes are required to run your business \u2013 and what will be needed in the future?
\n\u2022 Think about soft skills. As well the ability to run and develop the business, your successor must have the appetite to do so. Look for vision, passion and work ethic.<\/p>\n

\u2022 Be impartial. Having identified the necessary capabilities, draw up a job spec, and evaluate your \u2018candidates\u2019 objectively. Get an external perspective to help with this.<\/p>\n

\u2022 Have realistic expectations: Does your chosen successor have all of the skills for the job? If not, can they be developed?<\/p>\n

If you conclude that one or more family members shouldn\u2019t take over the business, there are other ways to support the next generation. Our next blog will look at this in more detail.<\/p>\n

Preparing for succession<\/h2>\n

Being in charge of the business may be second nature to you, but it will be new to your successor. There will be much to learn. So it\u2019s vital that you begin planning the transition some years in advance.<\/p>\n

With enough time, you can create a structured training and mentoring programme, to help the next generation acquire the skills to make the business a success.<\/p>\n

This should involve exposing them to all aspects of the firms\u2019 operations, in order to instil an in-depth understanding of the business before they take the reins.<\/p>\n

At the same time, however, restricting their business experience to the family firm alone can be limiting \u2013 unless it\u2019s a larger company, with several senior managers to learn from. Stints working at other firms will provide a different perspective on managing a business, and may prompt fresh ideas that may help strengthen your own operation.<\/p>\n

The success of your transition planning will play a huge part in determining whether your sons or daughters will maintain the success of the business you\u2019ve worked so hard to build \u2013 and pass the legacy on to your grandchildren.
\nIf these issues sound familiar, and you\u2019d like to discuss succession planning for your family business, please contact Larry Phillips<\/a>.<\/p>\n

This is the first in a series of blogs on family business<\/a> succession. If you\u2019d like to know when future instalments go live, please sign up for updates.<\/a><\/em><\/p>\n

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If you´d like to get future articles to your inbox:<\/h3>\n\t\t\t

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Running a family business isn\u2019t only about making money. The owners of course want to maintain and grow the family wealth; but they often want to build a business that can be passed on to future generations.\u00a0 This can be easier said than done, however. According to the Family Firm Institute, less than a third[…] <\/p>\n

Read More<\/a><\/div>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[598,471],"tags":[613,615,614],"class_list":["post-2125","post","type-post","status-publish","format-standard","hentry","category-family-business-accounting-tax-advice","category-individuals-families","tag-family-business-succession","tag-nurturing-successors-for-family-businesses","tag-successors-in-family-businesses"],"acf":[],"yoast_head":"\nNurturing the next generation in a family business<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.goodmanjones.com\/blog\/nurturing-next-generation-family-business\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nurturing the next generation in a family business\" \/>\n<meta property=\"og:description\" content=\"Running a family business isn\u2019t only about making money. The owners of course want to maintain and grow the family wealth; but they often want to build a business that can be passed on to future generations.\u00a0 This can be easier said than done, however. 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