How To Sustain A Family Business Over Multiple Generations


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How to Sustain a Family Business Over Multiple Generations

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Preparing the next generation to lead is one of the hardest parts of running a family business. Whether a company has been run for generations or just one so far, knowing when to hand over the reins to the next leader is a daunting task. Picking the right person for the task and strengthening them for the task is something that many family business owners face throughout their careers.


Of course, not every family business has a successor who will take over the leadership of the organization. Some company founders may not have children or other relatives they can rely on to run the business, and in other cases the relatives are not interested in taking over the company. Senior leaders with an impending leadership change have an advantage, but they often worry about their relative’s ability to deal with upcoming challenges they know will come up.

However, preparing the next generation for what is to come is vital.

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People learn from experience, not from lectures

Think back to when you were a young adult traveling the world outside of the proverbial parental nest. You have probably come across a few unexpected scenarios that have probably impressed you so far.

You may have bought your first car without anyone’s help and ended up with an expensive monthly payment at high interest rates because you didn’t understand the importance of accumulating credit. Maybe you messed up an early relationship or traveled abroad for the first time. Typically, these experiences create memories that stay with us for decades, all of which can act as learning experiences that we pay attention to when faced with scenarios that require us to act.

While you may remember the countless conversations your parents gave you, they probably didn’t resonate as much as an authentic experience could. They certainly described the possible consequences of our actions, but unless you actively went against the advice, you probably never faced the consequences.

Thus, it may be tempting to rush down and prevent your child from making a decision that you know will adversely affect him, but allowing him to experience the consequences will help him make better decisions in the future, which will positively affect the family business. .


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Let the next generation grow

Lecture to the future generation about what it takes to run a business will not give the desired result. Instead, promising leaders must have their own experience away from the company (and the eyes of their parents) in order to realize their full potential.

If “saving the day” is a sticking point for you, it might be time to let your kids experience life outside of your constant supervision. For example, if they are planning to go to college, promote out-of-state or overseas universities.

It is very important to allow the next generation to identify potential solutions to problems and try them out. Even if you know the solution won’t work, they’ll love coming up with a new idea and implementing it. They will have space to grow into themselves and be better equipped to overcome adversity as a result.


Let your successors develop their individuality

A child or relative who grows up in the shadow of a family business needs time to develop their identity. The surname may be well known in their local community. People are more likely to associate them with their parents’ name and company, and sometimes being the child of a family business owner makes it easier to find acceptance in preparatory schools and colleges.

It is crucial to push them to create their own identity by working towards a degree of their choice and joining clubs or activities that interest them. Don’t impose your agenda; allow them to express their individuality.

Also, instead of hiring your family business fresh out of college relative, ask them to work for another organization for a few years. The experience of working away from the family business will open their eyes to new ways of dealing with work issues that could benefit the family company in the future.

On the subject: How to successfully prepare a family business for the next generation

Push character development activities

People who always have someone to “help them out” never get the chance to explore their abilities. Whether you’re the founder of your own family business or a second-generation executive, you’ve probably failed in some of your endeavors, and you probably remember your failures well and what it took to overcome them.

Facing tough challenges and overcoming them is part of developing a strong character. Instead of letting them give up and let someone else take over the task, future leaders must work through their own struggles.

Give your future leaders a chance to fail. As tough as it sounds, they learn that hard work and thoughtfulness are critical to overcoming obstacles and gaining the confidence they need to overcome future setbacks.

Don’t hand it all on a silver platter

You’ve probably worked very hard to get where you are today, and you’ve probably seen significant gains, losses, and everything in between. You need to make sure your future leaders understand what you’ve been through, even if they didn’t witness it in the early days of your company.

Instead of directly handing the keys to your business to the child, make him work for him. If you’re approaching retirement age and they’re not ready to run the business, find another family member or trusted outside consultant to take care of it for a while. They can mentor the next generation and move them along the path of succession according to their respective timeline.

It may be tempting to assume that the next generation is ready to take over your company and let you enjoy your twilight years, but you must give them time to develop their skills and realize their identity. The best things in life come from hard work and determination, so give your company’s future leaders the opportunity to shape their character before handing over your business to them.


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