Handing over your company is never an easy task. Just because you are passing it over to your offspring, doesn’t necessarily make it much easier. It’s something that many business owners have to consider.
If you, as the company owner, only have one child, your decision will be easy. If you have more than one child, you will need to rely on your intuition and experience. In both cases, however, it is necessary to determine whether or not your child is actually interested in running the business. They may have completely different interests and may not see their life mission in running a family business. If the former is true, then you can start the handover process.
Did you know that it will take you at least three years to prepare your descendant for their new role as the head of the company? The most important thing is for them to get to know the company perfectly, not just from the outside, but especially from the inside. Your successor should be familiar with internal processes, with employees, but also with business partners. Particularly in small and medium-sized companies, the founding father is a bearer of respect, admiration from employees, as well as good relations with customers and suppliers, and they must fully transfer this responsibility to their successor. Building trust takes a lot of time and effort.
The most ideal situation is when the successor has been working part-time in their family company since their youth and has been climbing up the company’s ladder with their increasing age.
How to hand over quickly?
Once the successor is ready to take over the company, then it’s time to “hand over the thrown”. At this point, you are bound to ask the question of whether to hand over the company all at once or gradually? There is probably no clear answer to this question. There are several options, and you have to decide to the best of your abilities.
If, however, the successor has been working in the company for a longer period of time and is perfectly familiar with everything, then you have prepared the ground for an immediate handover. This means that you withdraw into seclusion and leave the entire company and its management solely up to them.
The option of a gradual transfer is also a common one. And it’s not because they don’t trust their successors, but often because giving up their business so suddenly is hard for them. In this case, it is necessary to divide future roles (e.g. the successor will be the executive director and parent is the owner, then chairman of the board), and also to determine the time schedule for the full handover. The issue is, however, that not everyone can easily leave a self-built company. Therefore, it is common for the owner to continuously postpone the handover date. The solution may be to set a deadline for achieving a certain financial performance or company growth.
Don’t forget about communication
Communication is very important in company management and it is no different when handing over the company to its successors. In fact, it’s one of the most important things you bear in mind. The family should especially be aware of the planned steps in great detail. There should be agreement among all members of the family. This will prevent unnecessary disputes in the future. This is particularly true if the successor has siblings, but the company is only being transferred to one of them. Clarify everything in advance, make sure everything is legally insured, even from the point of view of inheritance. This is the only way to prevent possible permanent damage to family ties and bonds. If you any advice, we are here for you.