On this segment of Dirty Secrets of Small Business, co-hosts Jack Mencini and Adam Sonnhalter discuss the question: How do you , as the small business owner know when to start the transition of your business? Transitioning of your business tends to sneak up on you and when this happens, how do you tell the next generation that you will be leaving and who do you choose to take over the leadership?
As business coaches for Maximum Value Partners, they have seen situations where it is only one son or daughter and that is easy. If you have several children who are “interested” in taking over the leadership, you need to sit down and have some adult conversation. Talk about it and you may not be able to determine who is the one, but try to be fair. Discuss fairness and key business issues and what strengths each individual brings to the business.
If you have had the situation that the individuals being considered have been in the day to day operations of the business and you have seen how they perform and they are already part of the business… that is a big difference. You are not starting from ground zero and are able to transition the company to someone who has been involved. The business owner has a good idea of who has the strengths to handle the challenging dilemmas and you might not be “boss” material. You can also have the discussion on if there could be a joint partnership with both siblings having leadership responsibilities. Jack and Adam warn that not everyone wants to be in charge.
Try to first figure out who should be the #1 person to be in charge and if the secondary person is someone can work with the sibling who will be making the tough decisions in running the business.
There are also different “work arounds” to run the business that might be a solution of both siblings having leadership in different areas of the business. One can be in charge of a divisions of the business if there is a clear delineation of responsibilities that won’t cause friction going forward. It comes down to what is best for the organization and what is best for the individuals involved.
For the entire overview on transitioning 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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