The continuity and success of a company largely depend on how the generational transition is managed. Entrepreneurial parents should not only focus on instilling core values and basic skills in their children but also prepare them to face the challenges of the business world. In this article, we explore the essential elements to ensure the next generation has the ability to take the business to the next level.
Raising a child to be an entrepreneur?
From a young age, parents teach their children key life lessons: how to walk, eat on their own, ride a bike, read, and dress themselves… All these activities require love, patience, and effort. They also instill essential values like honesty, respect, and responsibility.
However, for an entrepreneurial parent, there’s an added challenge: preparing their children to be future business owners. This could mean starting a business, acquiring one, or continuing a family business.
Leadership and ownership: Different challenges
Transferring the leadership of a company is not the same as transferring its ownership. Leading a company requires different skills than being an owner.
Children may have diverse talents, whether in sports, music, or board games. But just as everyone needs basic training in math, literature, and science, it’s also vital that they have basic training as shareholders, even if they don’t have the vocation to lead.
*How to prepare children as shareholders and leaders?*
– Involving them in business decisions from a young age.
– Offering specialized training programs.
– Introducing business mentors.
– Promoting a business culture at home, regularly discussing business topics.
The freedom of shareholders is crucial
Children will inherit shares of the company. But without proper training, this can lead to poor decisions and loss of value. The situation becomes more complicated if they don’t have the freedom to sell their shares.
The freedom to sell shares is key. It allows those who are not interested or capable of leading to make decisions that benefit their personal situation without harming the business. Planning a property structure that facilitates the negotiation of shares can prevent conflicts and ensure business stability.
Conclusion
Raising entrepreneurs, planning the succession of ownership, and designing companies that allow shareholders to easily negotiate their shares are key challenges for ensuring the family business successfully passes to the next generation.
Make sure your business legacy endures and continues to grow with each generation!
