HOW TO GET THE NEXT GENERATION INTERESTED IN THE FAMILY BUSINESS?
Many family businesses struggle with what to do when the next generation is not interested in taking over the company.
A family business is a valuable asset, but only if the next generation is wants to carry it on.
Without the interest and commitment of the next generation, the business will eventually fail.
There are many reasons why it’s essential to keep the family business going.
For one, it can be a valuable asset.
- If the business is successful, it can provide a comfortable lifestyle for the family.
- It can also be a source of pride and a sense of accomplishment.
Here are some tips for continuing the family business forward.
1. Introduce The Business To The Children
- The best way to inspire children to work in the family business is to show them the company values and how the business fits into the family’s lifestyle.
- Kids should be involved as much as possible in the day-to-day business activities.
- This will allow them to see the company realistically and understand how it impacts the family.
- Involving them in the business early will encourage interest in continuing the company.
2. Define Roles & Expectations
- It’s important to be clear about the roles and expectations of each person.
- When everyone knows what they should do and what is expected, it can help keep the peace and avoid conflict.
3. Communicate & Respect
- Communication is essential for all relationships, even those within a family company.
- Encourage everyone to openly share their ideas and thoughts, and be sure to listen to what others have to say.
- Respect is of great importance in a family business.
- Even if family members disagree, they must always respect one another.
- You can affect this by setting a positive example and encouraging behaviour you would show to a stranger.
4. Improve & Reinvent The Company
- For any company to survive beyond the first generation, it must be improved.
- Take a look at what’s currently being done.
- Is it the most efficient way to run the company?
- Are there newer technologies that could help?
- Instead of maintaining the status quo, strive to improve yourself.
5. Pass On The Culture
- One of the best ways to ensure the business remains in the family for the long run is to pass on the company culture.
- This includes traditions and rites that need to be followed, including how you run the business and how employees are treated.
6. Involve The Children In Business Decisions
- Bring them in early and let them have input into key business decisions.
- Even minor involvement can make a big difference and make the next generation feel valued and involved.
- Instilling responsibility and commitment early, as the more, they learn about the company, the more they’ll care about its future.
7. Have A Transition Plan In Place
- Having a transition plan means you’ll be able to pass the business on to the next generation successfully.
- Let the children run the business for a while.
- This can be tough for the first generation to swallow, but teaching them how the business operates is far better.
- This way, they can run the company with little or no supervision from you or other family members.
8. Consider Splitting The Business
- If the children cannot reach a consensus on the company’s management, it may be in everyone’s best interest to separate the business into two or more entities.
- This can include splitting up the work, or it might mean splitting up the customers or the target market.
9. Get Help If You Need It
- The decision to hand over the family business to the next generation can be challenging.
- It doesn’t have to be made immediately.
- You will need the help of a professional adviser like a lawyer.
These tips help get the next generation involved in the family business and ensure a smooth transfer to the next generation.
You’ve spent your life building your business, but you’re not sure what will happen to it when you retire. Speak to us over video consultation via Lawyer Anywhere for advice on planning your retirement exit strategy.