It's natural to want to pass on your business to family, but favouritism doesn't always make sense and can destabilise the business. This guide examines what you need to consider and how smooth the transition if you decide you definitely want to keep it in the family.
Before passing over the business to a family member you need to ask yourself several questions. Firstly, it's essential to decide why you're passing on the business to a family member and if they're up to the job. Then you need to find out whether they want to do it. It's pointless planning your big succession if the person you have in mind to take over wants nothing to do with the business.
You'll also need to look at what skills your successor will need. If they're already working for the business, they'll have a good insight into it but they may need to improve on their management skills. They'll also need to be mature enough to cope with managing people and the transition. Ask yourself what they add to the business and what may you be losing by passing it on to them. Then address these issues and work to rectify them.
When passing your business over to a family member, you'll need to consider other members of staff. Think about how the changes will affect them and you will need to be especially up front with your senior management team, who may have expected to succeed you. You'll need to prove that the family member is capable of doing the job and it's important to explain why you've chosen them.
The transition of passing over the business should be a gradual one. Thinking you can leave on a Friday and they start the next Monday could be a massive and costly mistake. Ideally they should work with you for six months to a year. This will allow them to shadow you, prove to you that they're capable of taking over the business and importantly, it will reduce the risk of animosity amongst other staff members, if they can see the family member learning the ropes and proving they can do the job.
Once you've handed over the business, it's important you take a step back. By now you have trusted this person to take over the running of the business, so don't spend all your time looking over their shoulder, not only could this make them feel you don't trust them but also undermine them in front of staff. However, you should be on hand to offer advice and make sure that you set clear guidelines for who makes key decisions and when you want to see progress reports - this will avoid any room for misconception.
To help you on your business journey, we've created Smarta Business Builder, the complete online tools package for growing your business. Website Builder, Business Plans, Accounting Software, Legal Documents and Email - all in one place - from just £20 per month with no contract! Try it out today.