The majority of family businesses aren’t successfully transferred to the second generation, and only about 15 percent make it to the third. There are many theories why.
A likely factor is that the second generation, who didn’t sacrifice to launch the business and see it through the lean, early years, lacks the resilience to persevere. Another reason is that problems occur if parents hand the business over too quickly to adult children who still lack experience.
Some entrepreneurial parents attempt to avoid these problems by making their successor children start at an entry-level position and work their way up the organization.
But this fast-track status often backfires, causing resentment from non-relative staff who may be more qualified, better educated, or have longer tenure.
To circumvent this, some founders require their children to earn a college degree and put in time at another firm to learn essential skills before joining the family business. Although this approach offers the greatest chance for success, it’s not a sure-fire strategy.
Regardless, if your goal is to pass your TAS to your children, be intentional about it and plan.
Don’t leave the business succession to chance, or you may end up like the majority of family-owned businesses that fail to successfully pass the baton to the kids.
Want an answering service that grows without burning out your team or your margins? In The Profitable Answering Service, Peter Lyle DeHaan draws on three decades of owning, running, and advising answering services.
Peter Lyle DeHaan, PhD, has spent his career in and around the answering service industry. He’s owned, managed, bought, sold, and merged answering service businesses as well as consulted, written, and programmed for the answering service industry. Learn more at PeterLyleDeHaan.com.
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