For many entrepreneurs in Kentucky, running a family business is a dream come true. And most of those business owners do not want that dream to disappear even when they are gone. That is why it is critical for business owners to consider who will succeed them and keep the business running far into the future.
However, choosing a successor is not an easy decision. Here are some tips to help business owners select the successor that best fits the business’ needs.
Ask yourself a few questions when considering candidates
In a family business, there are often several potential candidates to choose from, including children, siblings and perhaps even nieces or nephews. In some cases, a candidate might even be outside of the family.
Regardless of their relationship to the business owner, there are a few questions owners should consider to help determine candidates:
- Are they passionate about the business?
- What goals do they have for the business?
- How well do they manage money?
- How do they manage conflict and challenges?
- What are their values?
Many business owners might already have a successor in mind, but it is still critical to consider these questions before making a decision. After making a decision, it is important to communicate the choice clearly and confirm the decision with shareholders, partners and any other relevant parties.
Consider the business’ future
A mistake that many business owners make when choosing a successor is that they want their successor to mirror their exact beliefs and goals for the business.
It is important to maintain the business’ integrity and preserve its legacy. And to do so, a successor usually must share similar goals and values with the current business owner. However, it is critical to think of what the business’ future might look like and choose the successor who can support the business long-term.
New generations might have to make changes to keep the business relevant and keep up with market trends. And the best candidate for the business now, might not necessarily be the best candidate to ensure future success and longevity.
Keep emotions out of the decision
It is helpful to put emotions aside during the decision-making process. When owners have built their business from the ground up, they likely have emotional attachments to their hard work. However, making a decision based on emotion is not always in the best interests of the business.
Kentucky business owners should choose a successor sooner rather than later. This helps prepare the business owner, the successor and the business for the transition.