There was a time in our country when almost 50% of all small businesses transitioned to the next generation. Small business was family business and all members of the family worked in the company. This was a time when it was the rule not the exception that the children in the family learned everything they needed to know to succeed in business by working in the business rather than attend college. Signs reading Father and Son covered the town signifying a continuity and legacy of small business providing product and service for generations of inhabitants. Yes, the small businesses that developed after World War II had a planned exit strategy from the start. The business would transition from the senior generation to the junior. And, in those days that meant father to son.

With almost 50% of all businesses in the United States now owned by women that scenario is changing. Women also want to perserve the business for the next generation and that transition could be as likely to a daughter as it is to a son. This is not to say that men are not turning their businesses over to their daughters as well, as that too is on the rise. The purpose of this Blog is to discuss how the family succession plan exit has changed.

First -although all the family members are involved with a small business from the start the youngest members have many more opportunities to explore outside the business than they once did. A college education has become the norm for kids who grow up in a family business and even if the goal is to have a child take over the business, once they leave home it is not as likely that they will return. College opens their eyes to options never before offered.

Second - when the child has an interest in running the family business it is best if (s)he spend time working in the industry with a competitor first in order to provide a broader view of the business in general. Learning from others in the industry provides the child the opportunity to share best practices with the family business once (s)he returns. Most often the child brings a new set of business skills to the family business. Spending time training- often two or more years with Mom or Dad - before the transfer of leadership will better the chance of success. Remember in a succession exit, the business must succeed if it is to pay dividends to all family members. The business is still the family inheritance and its continued success is often needed for the financial necessities of the senior generation.

A family succession plan requires as much if not more planning than other exit strategies. You, the entrepreneur, must also take into account other family members who do not go into the business and how they will be compensated if the business is the only family asset. Make sure to seek outside, OBJECTIVE, advice from lawyers, accountants, financial advisors and a business coach who works with family succession plans.

If your son or daugther has what it takes to step into your shoes and take business to the next level, and wants to, it is time to start planning the transition NOW.

You may not see the Father and Son sign in the window as often as we once did in the 1950s, but a large percentage of today's small businesses are Mothers and Sons and Daughters and Fathers and Uncles and Aunts.......family succession is an exit strategy well planned.

Email me for a 30-minute FREE consultation regarding your exit strategy.