I stumbled upon an Irish Family Business report recently by PWC, they identified the following statistic; for every 100 businesses started, only 33 will survive the founder. Of the 33 that survives, 14 will survive into the second generation, and of those 14, only 2 will survive to the third generation. Scary statistic isn’t it? That’s why succession planning is critical for family businesses, as it ensures that the company can continue to thrive for future generations.
However, navigating succession planning can be challenging and requires careful consideration and planning. Here we will discuss best practices for successfully navigating succession planning in a family business.
Developing the next generation of leaders
One of the most critical aspects of succession planning is developing the next generation of leaders. This involves identifying individuals within the family who have the skills and experience necessary to take on leadership roles within the company. By providing them with training and mentoring opportunities, family businesses can ensure that the next generation is well prepared to take on leadership roles when the time comes.
Managing expectations around ownership and control
Another critical aspect of succession planning is managing expectations around ownership and control. It is essential to have open communication with all family members about their roles in the company and what their expectations are for the future. This can help to avoid conflicts and ensure that everyone is on the same page.
Developing a clear roadmap for ensuring long-term success
Finally, developing a clear roadmap for ensuring long-term success is essential for succession planning. This involves identifying the company’s long-term goals and developing a plan to achieve them. This may involve diversifying the company’s offerings, expanding into new markets, or investing in new technology. By having a clear plan in place, family businesses can ensure that they are well-positioned for long-term success.
In conclusion, navigating succession planning in a family business requires careful consideration and planning. By developing the next generation of leaders, managing expectations around ownership and control, and developing a clear roadmap for ensuring long-term success, family businesses can successfully navigate succession planning and ensure that their company continues to thrive for future generations.
To find out how CCO can help you navigate this process please get in touch with us, we have over 24+ years working with Family Businesses, contact robbie@cco.uk.com