When a child is young, the main way they go through life is to copy their parents. Parents who are business owners often think that of course their child is going to take over the company after them. The older a child gets the more individual and unique they become. Today, they are more likely than ever before to go their own way and forge their own path through life. There is a lot of emphasis on independence in America, and kids nowadays are taking that to heart. So if children want to branch off from the family business, but their parent wants them to inherit it- what does that mean for the company?
Never assume your child will take after you
Some parents don’t want to imagine how their children could possibly not want to take over the family business after them, but it has become almost a common occurrence. Business owners have the tendency to make assumptions about what their children want, but never actually talk to them about passing ownership onto their child. This is a serious mistake because they end up making hasty decisions regarding succession.
It could have been an easy discussion; just asking a few questions as they grow up about how they feel about the business and inheriting it. About 41% of family owned business owners have intentions of passing on the reigns to the next generation.
Some parents can tell that their kids aren’t interested in the family business. It may also be the case that child starts out wanting to work in the family business. But after actually experiencing what it entails, they change their mind and decide it isn’t for them.
So what do I do if my child doesn’t want to take over?
Less than half of business owners have a plan for the future of their family business. Even if you are very confident that your child wants to take over, you should have contingency plans in place. Even if you can’t pass your business on to your children, perhaps your grandchildren will share your passion.
Another possible solution is handing the company over to a highly placed managing employee. They will already know the ins and outs of your business. They’ll understand what goes into the business as well as what comes out. So there will be less training involved if someone already knows somewhat how things should be running.
You could also cash in on your company. Consider selling your business to a 3rd party to make some nice money to fund your retirement or next business venture. This way you can see some extra profit, and you can vet anyone that might be interested. You can make sure they’re experienced and have an interest or passion in your industry.
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