Family Business Succession Planning – Training the Next Generation
One of the key elements of a successful family business or family farm succession plan is training the next generation. This training can be both formal and informal, but it should be intentional and not left to chance. Depending on the size of the business, this may be tasked to a single individual or multiple individuals. Some questions that should be addressed are:
Does the successor need to complete education in a particular area?
Do you want the successor to gain experience working outside of the family business?
What skills does the successor need to develop?
The successor should be trained in company governance and basic accounting. The successor should be integrated into key business relationships. The successor needs to understand your industry. The successor’s roles and responsibilities should increase and evolve incrementally. It is vital that all of the responsibility not be thrust upon them suddenly and without sufficient preparation.In establishing an intentional training plan, the departing owners should remember the innovative spirit they brought to the business and give enough space to the successors so a culture is fostered that promotes new ideas. Remember, the successful transition of the family business is important to your retirement plans. The success of your successors does not diminish the importance of what you did in the business. By intentionally approaching the training of the succeeding generation, the family business can continue to thrive and establish a culture that recognizes the necessity of and value in that next generation.