Business is all about relationships and of the nearly 30 million U.S. small businesses, 20 percent are family owned. You’ve worked hard to become your own boss and create a company that offers unique products and services and few things compare to getting to share your company with your family and loved ones.
Almost half of family business owners expect to retire in the next five years but do not have a succession plan. While you are looking toward the future and thinking about your legacy, it’s important to think of the key people you will want to eventually take over your business. If that includes family members, you’ll want them to gradually have active roles in your company.
Here are ways you can encourage your children to be a part of your business and your company’s legacy.
If you’re like many families, your children are interested in what you do every day, including running your small business. Tell your children about your business at an early age – what you do, why you do it, what you like about it and your challenges. If you’re ready to join over 5 million U.S. companies and become a family business, offer your daughters and sons an opportunity to work at your business after school and during summer vacations.
Give them tasks organizing files, restocking supplies and cleaning up around the office to help them gain responsibility and learn more about your business. You should ask their opinion – find out what they think of your business and ways they can contribute in the future. Plant the seeds and get them thinking about the possibilities.
For added incentives, pay your children a small “salary” to reward them for hard work. You could even open a joint savings account with a child-friendly debit card to help them learn to manage their finances and the value of a job well done.
Encourage your children to learn more about your business and participate in it but never add pressure. Present it as an opportunity to consider their options and emphasize that their choice of a career path is theirs. Be encouraging and supportive of your children’s job choices whether they decide to work for you or another business.
If they indicate they would like to join your company, create a path to make that happen. This can include specific on-the-job training when your children are working part time and a business-focused college curriculum in your company’s areas of specialty. A full-time job offer to your children should be for a legitimate position in your company that fills an important need, not one that is designed simply to employ them. Their role should be fulfilling for them and a beneficial addition to your company.
When it’s the right fit, your children and your company will benefit. Use their fresh insights and talents to your business’s advantage. “In most cases, family businesses are stronger because of the complementary skills of their members,” says Bernard Kliska of the Family Business Center and Chairman Emeritus at Loyola University.
Before your children officially take on a permanent position within your company, have an “interview” and set detailed ground rules and expectations. While your relationship with your children is obviously different than with other employees, there should be no favoritism and you should have the same expectations for your children that you have for every team member.
Conversely, your children may feel extra pressure to “live up to the family name” and think they constantly have to prove themselves to you and other team members. Emphasize that they are with your company because of the unique value they bring – it’s enough for them to “just be themselves.” Like with all of your employees, have regular performance evaluations and provide direction as necessary. For example, if they are a salesperson and their sales numbers are not consistent, have a more seasoned member of the team work with them to provide a few pointers.
Like all of your employees, give your children every opportunity to succeed and make a meaningful contribution to your business. When you establish clear expectations, you set a clear path for your children and other employees to achieve success.
While younger generations are inherently tech savvy – they’ve grown up with tablets and smartphones – help them learn the specific types of technology you use for your business. No matter what area of the business they are in, keeping up with technology will be critical to their long-term success. For example, you may use artificial intelligence (AI) to manufacture your products, specialized software for warehouse logistics or online apps for your customers. Have your children work with team members who are focused on these technologies to help them understand their value and how they enhance your business model.
Nearly 100 percent of small businesses are increasing their investment in online marketing and indicate it is a key aspect of their business. Show your children how your website attracts more customers, why your search engine optimization (SEO) program helps customers find your business, how your social media creates customer engagement and why your eCommerce web page increases revenue and helps you make the most of your marketing budget. Online marketing gives you many of the advantages of your largest competitors and will continue to play a vital role in the present and future of your business.
When your children have indicated they are dedicated to making your business their career, it is time to begin talking about the future and their place in it. Succession is more than a plan, it’s a process. Open the channels of communication early. Start by helping them define their future role. Do they have a desire to assume control of the company, play a leadership role or continue in their current role? An open and honest conversation will help you shape their career and the future of your company.
If your children’s goal is to assume control of the company, hire a trusted lawyer and financial planner in your area who specializes in succession planning. He or she can provide helpful guidance and draw up a specific plan of action that includes a gradual exit strategy for you and a plan for helping your children assume control of the company. If your children decide they don’t want to be a part of your company’s future, you may feel disappointed but trust them in their decision. You want the best employees that are truly dedicated to your company to eventually take the reigns. And remember – you’ll always have your children in your life, whether you work with them or not.
If your children have an interest in your company, bringing them on as fellow team members can create a mutually beneficial business relationship. Setting expectations and a measurable growth plan will help to ensure success that’s all in the family.