Connect with us

Columns

This Is Why Succession Planning Is So Important

But just because you retire doesn’t mean you have to check out of the business.

mm

Published

on

EMBARKING ON A business transition plan is something that almost every family business owner must face as he or she nears retirement age. Unfortunately, the prospect of transition is often troubling, confusing and frustrating. Succession planning can be even more of a conundrum and can be caused by the following issues:

  • Family “baggage” that has crept into the family business.
  • Refusal of the older generation to let go.
  • A lack of readiness of the younger generation to take over.
  • Generational disagreement on the process of transition.
  • Deep-seated disappointment and family tension from the past.

Once you recognize the barriers that exist, you can work to overcome them.

Ultimately, there’s a reason why the next generation should take over a business when they are ready (and when the senior generation is ready to leave). Youth are generally more in tune with new technology, they understand the thinking of customers in their generation as well as others, and they have the energy and ability to introduce new ideas to the business.

Note my point “when they are ready.” The next generation needs to be groomed to take over, and that process usually takes years. Many have worked in the business for a decade or more, learned all the ins and outs of the operation and the industry, and earned the respect of employees, clients, and suppliers alike. They have matured from their 20s to their 30s or even 40s, and in the process, they have demonstrated an ability to make good decisions backed by a strong work ethic. At this point, it’s time to turn over the reins of the business as long as the senior generation is ready to slow down or retire.

There’s another important reason why it may be time to pass on the reins of the business. You aren’t going to live forever! As hard as it is to accept our mortality, eventually we have to. You’re going to exit the business one way or the other, so it is vital that you contemplate the inevitable and spend time planning for a comfortable and well-deserved retirement.

Additionally, whether we want to admit it or not, as we get into our 60s and especially our 70s we slow down, lack the patience and energy we once had, and are well past our physical prime. Raising a family, running a business, and dealing with rapid changes in technology and society all take a toll on our bodies and our psyche. As much as we might not want to admit it, we are no longer at our best operationally, nor do we necessarily want to be burdened with the daily stress that we once managed so easily.

Advertisement

But that doesn’t mean you should check out completely or not be available for advice when asked by the next generation. In fact, your years of experience and sage counsel will likely be more appreciated when you distance yourself from the business but still make yourself available when requested. There’s a right time and a wrong time to inject your opinions. The only right time is when they’re requested.

If you need help, drop me a line or give me a call. I’m happy to provide some assistance.

Advertisement

SPONSORED VIDEO

Moving Up — Not Out — with Wilkerson

Trish Parks has always wanted to be in the jewelry business and that passion has fueled her success. The original Corinth Jewelers opened in the Mississippi town of the same name in 2007. This year, Parks moved her business from its original strip mall location to a 10,000-square foot standalone store. To make room for fresh, new merchandise, she asked Wilkerson to organize a moving sale. “What I remember most about the sale is the outpouring excitement and appreciation from our customers,” says Parks. Would she recommend Wilkerson to other jewelers? “I would recommend Wilkerson because they came in, did what they were supposed to and made us all comfortable. And we met our goals.”

Promoted Headlines

Most Popular