In this week’s exciting discussion on Dirty Secrets of Small Business, Jack Mencini and his business partner, Adam Sonnhalter with Maximum Value Partners talk about: How does a small business owner transition their business to the next generation? It could be a transition to family or non family member from the big picture standpoint.
Adam brought out the statistics from the Wharton School of Business , that only one third of businesses survive from the first generation to the second generation. That is pretty daunting with the odds that only one in three family businesses survive! Only 15% of businesses make it to the third generation.
When a business owner thinks about transition and how to go about it, the one approach is for a son or daughter to learn about the father’s business to take it over by following the dad around for several weeks to get the necessary knowledge and insights to take over. Does it work effectively? … Jack and Adam would say no… not really.
There are other approaches for a transition, which include and is not preferred but does happen is death, which forces the transition no matter what. The best approach which is advocated by Jack and Adam is the Planned Approach Factor. Planning over several years on doing the transition mindfully with education, discussions, knowledge sharing, team meetings, etc.
For the entire overview on how to transition your business successfully to the next generation, including how to deal with situations where multiple children are involved, listen to the January 23rd podcast. Access all the Dirty Secrets of Small Business podcasts on iTunes or here.
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If you have a success story or a question you would like to share, email or call (firstname.lastname@example.org or 877-849-0670). You can also call in during the show each week at noon (EST) – 1:00 pm on WINT 1330 AM, call 440-946-9468 to ask your question to the Maximum Value Partners’ coaches!