Running a family small business is tough. Figuring out who will take over when you leave is even tougher. But if you want a terrifying, if entertaining, lesson on what can happen if you don’t plan for the future, tune in to the HBO series, “Succession.”
“Succession” centers on the infighting of family members as they battle over who will assume the helm of the huge media conglomerate founded by their domineering father, Logan Roy (Brian Cox). Patriarch Logan cares more about his business than his family, and he doesn’t trust any of them to be up to the task of taking over from him. So he refuses to plan for his succession.
Now most small business owners don’t have control over huge empires, and I certainly hope your family isn’t as toxic as the uber-rich Roy family. But even small family businesses have to deal with many of the same issues when considering who and when to pass on the company.
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You have to deal with challenges such as:
- “Tried and True vs. Bold and New.” In “Succession,” father and founder Roy wants to run the business the way it’s always been run. His kids want to move the company in new directions. This reflects the reality you’ll face too. By the time a founder/current owner is ready to leave, they’ve gotten into a groove that they know is profitable. But the next generation(s) want to make their own mark, respond to current and changing conditions.
- “I’ve got my own goals.” The biggest problem for most small business owners is that their heirs don’t actually want to take over the business – or they have no heirs to do so. A succession plan may need to be a plan on how to sell or dissolve the company if there are no family members to assume control. Who will manage that process?
- “You like her best.” Family dynamics may be the most crucial issue in deciding whether your business will continue to flourish after you leave the company. In many families, siblings don’t get along. Some think you play favorites (you probably do). Old resentments, petty disagreements, serious disagreements – all will play out in deciding who will take over the reins.
- “He got more than I did.” You want to treat all your heirs fairly, but treating everyone fairly is not the same as treating them equally. If one child is going to take on the burden of running your business, they may deserve/get more than others who don’t. Navigating what each heir ‘deserves’ is a minefield.
- “I’m never going to leave.” Who wants to talk about their own death, incapacity, even retirement? Many business owners refuse to acknowledge the inevitable. One day you won’t be there to run your company. Failure to develop a succession plan is a recipe for chaos.
But it can be done. Look at the example of Full Belly Farms, a successful organic farm in Northern California.
Now, it’s particularly hard to keep grown children on farms. Most kids want to head off to the big city. But the four founder/owners of Full Belly have created a system where the next generation is able to innovate – become entrepreneurs – as they take over management of the farm.
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“In high school, I built the first mobile ‘chicken cabana’ for an ag class I was enrolled in,” said Rye Muller, the 32-year-old son of Paul Muller and Dru Rivers. Mullers and Rivers founded the farm along with Andrew Brait and Judith Redmond in 1985. Now six of the founders’ children and some of their spouses have leadership roles on the farm.
Rye Muller’s chicken and pasture-raised eggs turned out to be successful, and he and his wife now manage the animal program on the farm.
“Three of my four siblings are back managing our different areas of the farm,” said Muller. “My brother Amon and his wife Jenna, in addition to farm events (such as farm dinners and hosting private events), have created grocery products from farm goods in their certified kitchen. My sister Hannah does floral design … I like the diversity of opportunities with the farm. We have a chance to bring something new, something different.”
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Moreover, Full Belly Farm started an internship program allowing young people to learn about farming, and this brings young energy as well. “The internship program means there’s people my age around,” said Rye Muller. “I believe with the energy from our generation combined with the solid foundation our parents paved will allow the business to continue to adapt and succeed.”
You may not be running a multibillion dollar mega empire as in “Succession,” but with some planning, flexibility, and willingness to deal with difficult issues, you can plan an orderly succession of your small business – like Full Belly Farm.