Did you know that ⅔ of businesses in the United States are owned by Baby Boomers? This is the generation between ages 55 and 70. This means that as this generation ages into retirement, they’ll have three choices for their businesses: either transition the business into new leadership, sell the business, or close.
Many business owners–especially those of small businesses–prefer to keep the business within the family. So, just how do you transition your leadership role to the next generation?
Getting interested family members involved early on instead of waiting until you’re ready to retire is perhaps one of the soundest methods of transitioning leadership roles. Your young family member will learn all the fine details that go into the different roles of the business by working those roles themselves. Not only that, but they’ll also be established as a part of the company early on, instead of suddenly shoehorned into a leadership role that neither they nor your employees are ready for.
Showing dedication to hard work and putting the time in is a great way to gain the respect and cooperation of employees. Assigning your family member increasingly important tasks is a great way to help them not only learn about the family business but also prove to employees that they care about the business just as much as everyone else. Employees who have been with the business are like family themselves; they want to see the next leader of the company show that they care for the wellbeing of the company and its employees. Do not shelter a new family member to the business. Make sure you give them important things to do, even if it is starting at the bottom and working in the warehouse. Let them make decisions, let them fail, let them learn from their mistakes. It turns out, business values can be family values as well.
Risks And Pitfalls
It can be all too easy to get comfortable with familiarity. As a result, it is terribly easy to become complacent. However, complacency is a massive detriment to any business. Therefore, it is extremely important for businesses that are changing hands within a family, specifically generations need to consider the critical aspect of curbing the potential of complacency within the company as a whole.
Allan Hirsh Advisors (allanhirshadvisors.com) provides coaching, mentoring and advising services to CEOs and business leaders in the greater Baltimore. Tune in to hear his radio show AHA Business Radio on Tuesdays at 6-7 pm on CBS Sports Radio, 1300 am. Visit ahabusinessradio.com to podcast the shows.