Transferring a business to a family member
Manage the family succession process
The key to a successful management transition is effective succession planning. This process could start as much as 15 years before you intend to step down. It is good business practice to include a written succession plan within your overall business plan.
This should contain:
- your key goals
- a timetable of the transition stages - from identifying a successor to the staged, and then full, transfer of responsibilities
- contingency plans in case the unforeseen happens, such as your intended successor declining the role
It's particularly important that you allow your successor an adequate training period. This time can be used for on-the-job and/or more formal training. You should also include time for the development of business and leadership skills.
One way to manage the training programme is for your successor to gain experience in other businesses. This allows them to gain independence and bring fresh skills and ideas to the business.
You might also allow them to gain knowledge of all aspects of your business by spending time working in each area of it. A key advantage of this method is that the successor is also meeting - and possibly being trained by - your key personnel.
Also consider whether it's best for you to phase in your departure by gradually transferring some key responsibilities to your successor or possibly reducing the days you work in the business.
Remember - communicating your plan to your family and management is essential and will help prevent misunderstandings and future conflict.