Is a Millennial a Good Fit to Run Your Family Business?

For family businesses, planning for succession is one of the toughest and most critical challenges. If you’ve been doing business for decades, let’s face it, your twenty-something granddaughter might see the world very differently than you do! Instead of dreading succession planning, try to view it as an opportunity to create a business that embodies your family’s values and mission for generations to come. It can also be an opportunity to bond with your younger family member in a deeper way.Successfully planning for the future of your business involves truly knowing, understanding, and collaborating with the next generation, which may mean a Millennial family member. As much bad press as Millennials get, they are actually a great choice to take over the family business! In fact, 62% of millennial-owned businesses reported increased sales over the past six months vs. 41% of small business owners overall. They are also the most likely to grow their workforce this year.

With their positive outlook, fresh ideas, and new skills, many Millennials are well-equipped to carry on the family business. So how can you successfully plan to transfer your business to your Millennial family member? Here are some recommendations:

Understand their perspective. Millennials are unlike any previous generation. They aren’t tied to traditions. They don’t want to live in the office when with a cell phone in their hand and wi-fi nearby, they can accomplish just about anything. They work hard, but differently. When it comes to work, they want to have a purpose, to feel they are tied to something important that impacts the community.Be open to new, innovative ideas. We just discussed how different Millennials are. Take advantage of those differences! They understand the developing market, and the importance of technology. Discussing new ideas builds trust and creates new opportunities. Taking time to go over some new ideas before transitioning to new ownership gives everyone involved the chance to effectively merge the incoming ideas with present business practices.

Communicate clearly. Don’t avoid talking about the succession process. Let your Millennial family member know what you are thinking and how they can be involved. This gives them time to consider if they truly want to be a part of the family business. If they do, the process of exchanging ideas and mentoring can begin early. You also have the chance to determine if they are truly a good fit for the job. (Read another article, Should your children leave the nest – and business – behind? for more insight on this decision.) Take time to train your successors. Once the succession plan is in place, take time to train the person/people who will be taking over for you. As I mentioned before, you want to be specific about your expectations, but not to the point that they become dependent on you for everything. Use your time to empower them as a leader. Also, it has been noted that employees in a family business are more likely to accept their new Millennial boss if they’ve been visibly and reliably learning the business rather than suddenly appearing in power overnight.

The goal when creating a succession plan for your family business is to simultaneously ensure the success of your business, and the health and happiness of your family. Just as with legal and financial decisions, the emotional or psychological aspects of succession planning often requires the assistance of a professional. If you are starting to plan for the future of your business, and you live in the Portland, OR/Vancouver, WA area, please contact my office to set up an appointment.