When the time comes for a new generation to take control of your family business, will the process go smoothly? One way to find out is to take the quiz below. Give yourself 10 points for every “yes” answer.
- Have you established a structured plan to transition your business to a new generation of ownership?
- Has each family member communicated a personal vision of their role in a business transition?
- Have all family members bought into a shared business vision?
- Are all members of the junior generation involved in some way with the business?
- Has each member of the junior generation begun a program of education to meet the needs of his or her desired role in the transitioned business?
- Has a role been established for the senior generation in the business transition?
- Have you considered the use of non-family interim managers?
- Have you established a system to provide career satisfaction for valued non-family employees who might be shut out of advancement into management positions?
- Have you shared your transition plans with interested third parties such as customers, vendors and bankers?
- Have you a solid understanding of the financial requirements (including any requisite funding for buy-outs and taxation) for a successful transition to new ownership?
Total your scores, then rate your transition readiness on the following scale:
- 90-100: Congratulations! You are well on your way to a smooth ownership transition.
- 70-80: You have addressed your needs for a successful transition and need to do some final paving on the road ahead.
- Less than 70: Time to preserve the future of your enterprise by taking productive steps toward a smooth transition to a new generation.