What makes the family enterprise unique and holds its competitive edge? It is the very close family connectedness, expertise and experience. However, to sustain this unique competitive edge, the family enterprise needs to start planning early, and very carefully, how future business successors will be groomed and developed from the family ranks to take over the company for its future success.

Family Company Succession Problems

• Treating all family children reasonably
• The reactions of the non-family employees
• Family communications and conflict
• Estate Taxes
• Executive and Management level organization and structure
• Determine how best to select successors:
• Groom one child from an early age to take over?
• Allow family members to compete and choose replacements and successors with the aid of the Board of Directors and/ or the Family Council?
• Should you choose the family successor without the input of an objective, third party?
• Form an Executive Committee of family members (3-5members)?
• Allow the children and/ or family as a whole to choose incoming leadership?

How to go about choosing future leaders and successors really is a factor of a particular family business’s history, current structure, Business Plan, success, future growth forecasts, planning, available resources (human, technical, strategic and financial), aspirations, goals, wishes and a host of contingent variables.  The complexity of succession issues really dictates the use of an experienced Business adviser, Attorney and Accountant to help develop and implement a successful Continuation Plan and  Comprehensive Business Plan.  The Business Consultant should be the quarterback of the planning process. He or she should coordinate the inputs of the current leadership, Board of Directors, Family Council, key non-family employee, legal, human resources and accounting; along with the Consultant’s experienced advice, to come up with an acceptable, flexible, successful Business Succession Plan.

A  Business Plan Consultant can be a great investment when replacement choices are limited.  If faced with this challenge, a family business needs to utilize professional help to:

• Analyze present key position assignments, responsibilities and performance to determine current capabilities and weaknesses, as well as, future succession management and leadership gaps.
• Take a Close look at the current company structure and determine if the structure needs to be modified to meet future human resource challenges.
• Do present family members need cross-training, leadership education and mentoring?  Or are there key non-family employees who can fill future leadership gaps?

In order to find a solution to a leadership and management future gap threat, it is important to have sound, objective, experienced third-party professional advice and expertise at hand.  Moreover, all present managers and key people, family and non-family, should be included in the decision making and planning process when replacement choices present an inherent challenge.

I find that family businesses that don’t address these Succession Issues can find themselves facing Business Turnaround. Plan today for success tomorrow!

About Frank Goley of ABC Business Consulting – The Article Author

Frank Goley has a diverse and rich experience base as a business consultant, business turnaround consultant, business plan expert, business plan writer, business coach, small business consultant, business planner, marketing consultant, online marketing consultant, seo consultant, and business plan consultant for ABC Business Consulting. Frank is considered an expert in writing, developing and implementing business plans, business turnaround plans, funding business plans, marketing plans, strategic plans and web marketing plans. Frank offers comprehensive business consulting, business coaching, business turnaround consulting, along with web seo, web development and web marketing consulting, to small and medium size companies. Frank is the author of a business plan book, The Comprehensive Business Plan Workbook – A Step by Step Guide to Effective Business Planning, and he has over 150 published articles and e-books on business success strategies. He also writes the Business Success Strategies Blog.