In almost every family business, the time comes when leadership is transferred.And where this succession used to be more or less self-evident, today we see a much wider range of options: a strategic sale, entry of private equity, or yet a transfer to the next generation.
At Gwynt we help entrepreneurs make choices that really suit their business and their family – pragmatic, well-founded and always focused on lasting results. From that practical experience, we have compiled a compact checklist of arguments for and against succession within the family.
Five strong arguments in favor of family succession
1. Entrepreneurship + external baggage
The new generation has demonstrable entrepreneurial drive as well as valuable experience outside the family business.
2. Clear vision and leeway
They know where the company should be in five years – and are given the mandate to deliver on that course.
3. Financial stability
The organization is solid enough to give the successor time to gain the trust of employees and stakeholders.
4. Growth potential in its own right
The business model is scalable; growing independently in the existing market(s) is realistic.
5. Broad family commitment & professional governance
The entire family supports the choice and the governance house is in place (advisory board, shareholder agreement, role and decision-making
Five weak arguments (duh better no family succession)
“This is how we do this here” 1.
Tradition alone is not a strategic reason.
2. Family feud as a curtain call
Conflict does not automatically disappear as a new generation takes over.
3. Resistance from a proven external board
If a strong management team leads the company successfully, family change can undermine continuity.
The organization is solid enough to give the successor time to gain the trust of employees and stakeholders.
4. The departing generation does not let go
Permanent interference (“founder’s shadow”) deprives the successor of room to grow.
5. Underestimating the challenge
The next generation mainly sees opportunities, ignores risks and shows unfounded criticism of the current course.
What does this mean for your business?
Every situation is unique. The key is to determine beforehand – together, openly and honestly – what arguments are at play for you and which direction is most future-proof.
Does your family business have the issue of succession (or sale) on the agenda? We are happy to engage in a conversation to explore options and create a plan that works for both family and business. Real breakthroughs are achieved together.
