I am a(n)
looking for help withGO
6th November, 2018
Over the years we have dealt with many successful second and third generation family businesses, but will family succession always be the answer; as the economy and industries change will the family way survive for the next generation?
Much is written about the millennial generation, will the family business provide this generation with the opportunities that they desire?
Family succession does remain a very viable succession strategy alongside an outright third party sale and possibly a Management Buy Out, but maybe before discounting the latter two, the following questions are worth considering:
Motivation – what is driving the family succession? Is it you, the business owner because it is what you did or have always thought would happen, or is it from a real desire of the next generation to get involved and add value? This should already be apparent in some way.
Family Dynamics – are there any family politics to consider? For example siblings not in the business and how will you feel about handing increasingly big decisions over to your child(ren)?
Workforce Dynamics – how will the workforce and in particular key members of the team react to the boss’s child?
Ownership – how will this be dealt with? There can be many complications certainly when there is more than one sibling in the business or siblings not in the business. How do you extract value? It is possibly counter intuitive for the family unit to borrow money to buy the business from family. Equally how will the younger family respond to possibly working in the parent’s business without ownership until they inherit it?
So, whilst family succession may be the answer there is still a need to consider how it will be implemented and to consider alternatives.
We have extensive experience in advising family business and owner managers on succession issues. For a free consultation contact us at firstname.lastname@example.org or 02922 331169.