As a coach and a mentor, I'm often asked a variety of unexpected questions. Over the last week, I was working with another client to help them plan for their retirement. Their retirement is many years away, but right now, they needed some help planning their future profits and if they should sell the business or if their children will take it over.
Their children are in their early 20s and haven't committed to working in the store. Both children finished their non-jewelry college education and were now reluctantly working in the store until they found a job they liked.
This is a good #ThrowbackThursday topic to what I wrote in April 2015 about the potential to get your children interested in your business. As a business owner who has spent more than 22 years building my business to this point, I wouldn't want to close it down when I retire either. I'd rather sell it or pass it on to the next generation as well.
By the way, no one will want to buy a business that's not profitable, but I'm skipping that conversation right now because I want to tell you my point of view on family business succession planning.
The Next Generation
At some point, the older generation running the store will have to openly discuss and plan for the challenges of passing the business off to their children, but I don't think that conversation should be forced upon family members who haven't yet discovered their career paths.
Instead of forcing the business upon the next generation, I've met quite a few successful multi-generational businesses (in and out of the jewelry industry) that allowed the transition to the next generation to happen organically. I've already heard plenty of stories about long apprenticeships where the children started working when they were young and learned everything there was to do in the store. They grew up loving the family business. It's a similar story I've heard from store owners born between the years 1955 - 1960.
Throughout my college days, my father also wanted me to work in his business. He owned a brokerage firm and wanted me to become a stock broker, but my career path was in computers. I did work for him for several years, but not as a broker. I was only willing to work for him if he let me modernize his business and set up his first computer network, and then manage it. Computers were quite expensive back then, but he eventually agreed. He hoped I would eventually become interested in taking over the business, but I just wasn't interested in the financial markets.
Even though the strategy backfired for my father to get me interested in his business, I feel it's a viable one for jewelry store owners to recognize. I demanded, and was eventually granted, the freedom to bring my personal interests to the business, and it became better for it. When the time comes to get your children involved in the family business, ask them if they have their own ideas to help improve the business, and give them the freedom to explore those opportunities.
Successful businesses are usually run by entrepreneurs who have learned to systematize tasks and can delegate responsibility while they continue to figure out how to improve business growth. The jewelers of yesteryear once repaired jewelry, worked on the sales floor, paid the bills, and managed employees. Small business owners had to do it all, but that's not how profitable businesses are grown.
The next generation of jewelry store owners does not have to be certified GIA gemologists, or metalsmiths, or even good at sales; they just have to be good at delegating and coming up with new ideas.
Entrepreneurship isn't something that you learn in school. Sure, you can get a business and marketing degree that says you know how a business should run, but the drive and desire to run a small business is something that needs to be ignited inside us all.
If time allows, hold off on that business succession planning conversation and figure out what will ignite the desire for your children to get deeply involved. Offer them the freedom to test their ideas so they can feel like they're making a difference and perhaps that will organically evolve into the desire to take over the business in the years to come.