If you want to be a good entrepreneur, practice early - The “seniors” should plan the handover of their life’s work at an early stage. Successful business succession starts early!
6 steps to successful business succession in the family:
How do I turn my juniors into successful seniors so that my life’s work can be successfully transferred?
1. give a stable smell
You should ensure early on that your children occasionally get a whiff of the stable. This can actually be achieved quite informally by taking the children into the company from time to time, showing them the different areas of the company and simply ‘letting them explore’.
Later, when they are older, there is the opportunity to introduce the children to the company through holiday jobs. This is the beginning of a good preparation on the way to turning the juniors into seniors.
2. provide first-class training
Ideally, of course, with a focus of study that is also reflected in the company’s purpose. It can make sense to study at a very practice-oriented private university with expertise abroad.
Before you plan to bequeath anything to your children, better treat them to the best education. It doesn’t always have to be a private university, good public universities are also suitable for the further education of juniors. However, you should always plan a stay abroad, even if it is not particularly relevant for your own company at the moment. The world is changing, and faster than we think. In addition, a stay abroad shapes you, foreign cultures sharpen your perception, strengthen your self-confidence and promote your language skills.
3. “Chasing the children off the farm”.
That means giving them the opportunity to develop freely after graduation, to decide for themselves who they want to work for and where. Of course, the best thing is if your children can go to direct competitors. But that will rarely happen. But perhaps there are association colleagues, suppliers or even customers from whom you can pick up a lot of knowledge for your own business.
4 “Making your own business sexy
Are you afraid that your children will be spoilt by the lure of the big wide world after studying and taking their first steps on foreign soil? Then make sure in good time that your company offers a perspective that is so interesting that your children will want to come back.
Your offspring will appear with a completely different self-confidence if he/she has been able to gain management experience in other companies. The acceptance of your employees is also likely to be significantly higher if word gets around about where and with what responsibility your children have already been active. Otherwise, theory and practice will quickly collide. This will always happen if you bring your children directly from university into your own company.
5. smooth the transition
Think about concrete areas of responsibility that you want to entrust to your children without really interfering and getting involved in the day-to-day business.
Allow mistakes if they are not repeated and it is not too expensive.
Discipline yourself by agreeing on fixed communication structures and binding work routines with your children. Even if it is difficult, stick to it so that the second planned jour fixe is not cancelled because of you.
Gradually hand over more responsibility. Let go and extend the leash. Your children should also be advised to demand sometimes.
6. formulate a clear road map and adhere to it in a binding manner
Agree with your juniors when they will be given specific responsibilities. (Which divisions / which powers of attorney ? procuration etc…)
Determine when the juniors will follow in your footsteps.
If necessary, set up an advisory board and appoint an external chairperson. This will ease the tension in dealing with each other and lead to the desired success more quickly.
Finally, a tip for successful business succession:
And last but not least, a note from a tax/legal point of view: As a rule, not all children can / want to be active in the company. Think early on how you want to deal with the children who will not be actively involved in the business. Should they be involved? How should they be treated fairly compared to a shareholding in the company?
The right thing for everyone is often better than the same thing for everyone”..
Also think about compulsory share waiver agreements concerning the company assets so that they are not endangered by unexpected, unplanned inheritance claims ? often triggered by children-in-law.