A loaded question, isn’t it?
Let’s say you are a family member who is part of a small business. The question of successors and business sustainability can become a daily concern.
Will your family business survive into the next generation? Who becomes the heir or heiress apparent after the current CEO – sometimes reluctantly – relinquishes their hold on the reins of the family business?
That question might become your #1 Elephant in the Room. There’s more involved than simply a changing of the guard.
Over 30% of all family-owned businesses survive into the second generation. Yet only 12% will survive into the third generation. That number is reduced to 3% in the fourth-generation and beyond.
What’s happening here?
Over the years, I’ve certainly had plenty of opportunity to gain a feet-on-the-ground perspective of this scenario. I coach people and companies: startups, entrepreneurships and small to medium sized family owned companies.
Running any business, let alone a family business, is hard work. It’s constantly in your collective founding faces.
Is there ever any “down time”?
By the time you get around to the third generation, there is reluctance to put in the long hours that grandmother/grandfather and dad or mom did.
That scenario makes family-owned businesses vulnerable to acquisition. This situation makes you, the current CEO, perk up when you get those phone calls from private equity companies wanting to acquire your business.
Are you going to hand off your family business like a hot potato to the first suitor who decides to court you? Do you understand what’s behind their offers and their acquisition dance?
This month we’ll explore aspects of your small to medium size family-owned business, what makes it tick, and the unique challenges that you face tactically as well as strategically.
There are some solid models and strategies to put into play. Let’s get that elephant out of the room, shall we?
Babette N. Ten Haken, President of Sales Aerobics for Engineers®, LLC, is a business coach and management consultant. She remodels startups and small-to-medium manufacturing and service companies experiencing difficulty with unpredictable revenue streams. She focuses on mindset, habits and business processes and practices which create Business Professionals of Worth.
Babette was named a Social Selling 2015 Top50 Influencer and a 2014 Top 50 Marketing & Sales Influencer. Babette’s blog won the 2014 Bronze Medal, Top Sales World. Babette’s book on horizontal business development and collaboration strategies, including tools, Do YOU Mean Business? is available on Amazon.com.