It may not ever be easy to choose a business successor, but it may be even more difficult if you wish to pass down a family business to a relative. Failing to handle the situation with delicacy can lead to family squabbles and rifts.
LGA offers some suggestions on how to handle the process with tact and diplomacy so that you can choose the best candidate without hurting any feelings or harming family relationships.
Gauge interest
It may be your dream to pass on your business to one or more of your children someday, but it may not be their dream. From your perspective, telling your child, “Someday, this will all be yours,” is a vote of confidence, but if the child is not interested in running the business, it puts undue pressure on him or her.
Instead, ask your grown children whether any of them want to take over the business someday. If some do, you have some candidates to consider. Your children should probably have the first opportunity to express interest, but if none of them do, you can consider other relatives, such as nieces, nephews or cousins.
Assess each candidate’s qualifications
Potential candidates for your successor do not necessarily have to have any prior experience running a business. That is something that you can train them in during the process. However, they should have, or be willing to learn, skills necessary for running a business, as well as the temperament to lead others.
Give each candidate a chance
Once you have determined which candidates are most qualified, give each of them an equal opportunity to prove themselves, asking each of them to take on different responsibilities at different times so they get a feel of all aspects of running the business. If you feel that your personal feelings are getting in the way of your objectivity, ask a non-relative in a position of trust to weigh in.
Once you have made your decision, communicate it to each of your candidates. Be prepared to justify your decision in a concrete way and say something positive about each candidate’s performance. Be calm and compassionate with those whom you did not select, who may have an emotional reaction.
