In many ways, family-owned businesses operate in a separate sphere from the rest of the corporate world. With the emphasis on family ownership and a tight-knit leadership circle, it’s easy to assume succession planning is handled for you. However, the reality may not be quite as simple as you anticipate. Children, nieces, and nephews aren’t always interested in running the family company, spouses may want to get involved, and, as time progresses so does your vision for your company.
Despite the likelihood of these shifts, many family businesses don’t plan for these possibilities. In fact, a PwC Family Business survey in 2017 found that only 45% of family businesses have a strategy suitable for the digital age while even fewer – 23% – admitted the development of a thorough, robust succession plan. An additional 46% are reluctant to hand their businesses over to the next generation, while 30% plan to sell to an outside buyer.
When you want to preserve the legacy of your business, proper planning now can make a big difference down the road. With these tips, you’ll be ready for what the future has in store.
Focus on Goals
In a sound business strategy, it’s most important to prioritize the objectives you have in mind rather than the path you’re going to take to get there. As things change, the road you have chosen may not be as smooth as you envisioned, so sticking to one particular methodology may get you lost along the way. By taking a broader approach and brainstorming alternatives before getting started, it’s much more likely you’ll see success.
Ask for Input
As the adage goes, two heads are better than one. Instead of sticking stalwartly to your own ideas on the business, don’t be afraid to ask for help. From independent consultants to up-and-comers in your company, those around you likely have beneficial and varying ideas that can help you stay competitive in an ever-changing market.
As business objectives change and develop with time, it’s important to stay organized through it all. This means delegation, ensuring all members of your management team are involved and engaged with your plans for the future. While the executive team will ultimately make all strategic decisions, your managers need to be on board to keep the ship afloat, and no one steers well when left in the dark.
Prepare for Change
Few things in business go exactly as anticipated, from your performance versus budget to the attitudes of the market around you. Instead of assuming everything will stay the course, prepare for change with strategic plans targeted at a variety of situations. For example, you may not expect a key family member to quit, but keeping an alternative strategy waiting in the wings should this sort of situation arise can help you mitigate losses when circumstances throw a wrench in your plans.
Planning a strong path forward can raise issues for any business, but family businesses intent on keeping things related can face unique challenges. When you would like a business partner you can trust to help you move ahead with confidence, our team is prepared to help. Contact Klein Hall CPAs today to learn more about how we can help you prepare for the future.