You have worked hard your whole life to build a business. Although your children are wonderfully successful in their own ways, it’s apparent that your predecessor lies elsewhere.
All of this uncertainty about the fate of your business goes out the window when your grandchildren arrive. As you stare into their eyes you begin to realize how important it is for your business to stay in the family. You want nothing more than for your grandchildren to have the opportunity to inherit this company that you have molded with your own hands.
Sometimes, ownership in a family business skips a generation for the betterment of the company. Less than one third of businesses successfully transition to the next generation. In instances where the owner wants the business to stay in the family until a successor is ready, bringing in non-family management can be a part of the succession plan.
According to Morten Bennedsen, Professor of Economics, hiring non-family executives can ensure the longevity of a family business and avoid the pitfalls of passing the business to the next available successor.
With outside help, a family business transitions to having both founders and managers. Bennedsen argues that this outside assistance can buy enough time for a suitable family member to take the reins. Bennedsen does insist, however, that this needs careful planning and consideration as this is a highly emotional matter.
While your ultimate goal is to preserve your business long enough to give your grandchildren a chance to take it over, you must not reduce the importance of your new management team. Taking the time to carefully select members whose vision aligns with yours will go a long way to ensuring your businesses longevity.
With careful planning and consideration, your family business can successfully pass through the hands of non-family management before, once again, having a family member at the helm.