Succession Planning in Family Businesses – Stephen Shortt
Winning On Main Street - Small Business Podcast
English - June 02, 2022 10:00 - 19 minutes - 18.1 MB - ★★★★ - 15 ratingsBusiness how to run small business run your business technology software business strategy small business Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
I grew up in an entrepreneurial family, when I was around five years old my parents started a psychometrics company called Selection, which centered around personality profiling, career guidance, interview skills, and selection guidance. Then a few years later my folks started an English as a Second Language school (ESL), teaching English to international students. The ESL business appealed to me as a young person, because I was able to travel around the world. I started as a marketing assistant and worked my way up until I bought the business about 12-years ago.
When it comes to purchasing family businesses, I’m a big fan of having sweat equity and capital at risk. Instead of just parents handing over a business to their children. Successful Succession is all centered around helping family businesses make the transition and not lose the family relationships in the process. Typically, there are four different ways to exit a family business when the current generation is done: 1) the business stops, 2) the business gets sold to external parties, 3) the business survives until a new leader is put in place with no power, 4) the family scales the business, and the next generation has skin in the game and is empowered to make decisions. This is the space we prefer to work in.
When we begin consulting with a family business, we often start with two key questions. What is the goal for the future of the business and who is the right leader for the immediate next stage? The right leader for the next stage doesn’t have to be the CEO for the next 40-years. One person might be great for the next stage and another is better for a later stage. Being an outside consultant allows us to come in and ask those types of questions without being hindered by the family dynamics that can cloud decision-making. The clearer we can define the purpose of the future business the easier it is to determine the right leader to put in place.
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