As 2017 comes to a close, the focus for many businesses in Kenya is to end Q4 strong. A mood aptly captured, during a recent conversation with a 2nd generation scion heading a family business with a footprint in various counties. Who stated, “this is not a usual end year, it will not be slow and sluggish for most, as businesses push to end the year strong, with every intention of starting 2018 on a high.” Wisely and efficiently, businesses are fine-tuning end year strategy execution: sales, purchases, and other business decisions to strengthen their businesses financially after a slow year.
However, many businesses continue to postponed — or even ignore— an even more important, once-in-a-lifetime game changer: which is to implement a realistic, workable strategy to pass on their business to a next generation. This is a predicament which continues to face people with business and property interest, if stories that seem to appear in the media with almost predictable frequency is anything to go by. Whether it’s called succession planning or transition planning, this is a map that ensures family businesses navigate a complicated terrain. It answers the question: “How will our family-owned business or wealth be preserved in the future, when the founder retires or moves on?”
In a typical family business succession conversation, one can’t help noting the bouquet of reasons presented to explain why family-owned businesses haven’t developed succession plans. For some, in this part of the world, there is a widely held belief, that discussing the founders’ exit from the business is neither appropriate nor urgent. And, by default, like most of us, many owners of family businesses are reluctant to confront their own mortality. This makes it difficult to communicate succession planning with family and non-family members involved. A situation further camouflaged by a justification, and rightfully so, to be preoccupied with steering day-to-day business operations.
While it’s not all gloom and doom, as some family businesses are doing a great job at ensuring transition. If you’ve already started transition planning, congratulations. Keep at it! And though you’re probably encountering challenges, you’re certainly doing the right, and necessary thing.
Family business transition won’t be quick or easy, it is challenging in all sorts of scenarios, and there is more than one way to do it right. What your neighbor [or competitor] is doing isn’t necessarily the right fit for you. And as family business founders pride themselves on hard work and commitment. Indeed these qualities which are key ingredients provide a vital support when — and if — the family business gets started on this vital, once-in-a-lifetime assignment.
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FAMILY BUSINESS: How to succeed at succession & How to keep a Family Business Alive for Generations
Ensuring continuity in family business requires an early start. Once, founders of family businesses were advised to begin succession planning at least five years before they plan to step back. Now, they’re urged to begin at least ten years, in advance, to better position themselves – the earlier the better. If you haven’t begun yet, and are within ten years of stepping back from full-time operations of the family business, get cracking this end of the year. It could be the beginning of an opportunity to ensure your family business is secured for posterity, after you step aside.
Set the stage for an enduring family business, get great ideas. Listen. Ensure your family business answers the crucial question; “what are we doing here today that will give us an enduring Return on Investment, and also grow the legacy and heritage for our family enterprise.” A family business that answers this question up front is better positioned to develop a far-seeing vision and empower the business’ growth into a multi-generational enterprise.
Keep focused, end the year strong, and begin 2018 on a high, fortify your family business for generations!
Article by: Peter Ouma Muga, Family Business Advisor & Coach at Institute For Family Business (IFFB) Contacts: firstname.lastname@example.org