The default position of many families today is to sell their business if none of their children display an interest or are ready to take over the business. This can be a fatal decision when considering the long-term welfare of the family.
Active Knowledge Question:
In your business’s succession, are you considering what is best for the long-term welfare of your family, as distinct from crystallising today’s wealth?
I finished secondary school – what we call year 12 in Australia – at age 17. At that point, I had stayed at school longer than any of my brothers and sisters, and my mother had made it quite clear that it was time to get a job and start paying my way. So I did. All my subsequent studies were undertaken as I earned and paid my own way, and contributed to the family coppers. I am sure many of the baby boomers and older generations started work much earlier than I did.
Finding a job, paying your own way, sorting out your career, supporting your parents, being entrepreneurial, starting a family – all of these activities help you to understand who you are and where you would like to take your life.
Today, I think many of these decisions come much later in life and, even then, are sheltered by supporting parents. Maybe a better way to frame them is not ‘activities’ but rather ‘responsibilities’. You take on responsibility for your life without the safety net of parents.
In succession, parents look to their children for signs of interest in the business and then their capability to step into their shoes. This, sometimes ad hoc, process must be undertaken with care and diligence. Why? Because I believe the environment of a family business can provide such a rich ground for your children and other family members to work in for their lives that it must not be surrendered without a fight.
Yes, sure, being in business is tough but it can provide a far more secure and fulfilling career than working as an employee in someone else’s business. It can also bring together a diverse family, as well as provide a good living.
But with all the opportunities that are available in the world today, maybe it takes a bit longer for children to find their path. Therefore, you may need to be more patient, invest personally in them as individuals, and encourage them to take on responsibilities earlier.
Most importantly, speak to them early on about what benefits working in the family business can deliver.
An entirely new level of performance.
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All the best in the success of your business,
Richard Shrapnel
