Should I Take Over My Family’s Business?

If your family runs a business that you’ve been actively involved in, you may find yourself being considered for the top leadership role as the current leader moves closer to retirement.  As this possibility draws closer, you are undoubtedly asking yourself several questions. “Am I the best person to take over my family business?”  “Is taking leadership of the business the right career path for me?” Or, “Will I disappoint people if I don’t accept the role of successor?”  These are all very common questions that are difficult to answer because of the emotion that is naturally intertwined in family business decisions.

There are any number of dynamics and nuances that will make your situation unique.  However, there are also specific topics you can work through as you reach a definitive conclusion about your career future.

That’s what we want to accomplish in this article – to give you key factors to consider as you weigh the pros and cons of taking over a family business. And we conclude with a great option to help you find the best person to lead the family business – which could, in fact, be you.

8 Factors to Consider Before Taking Over the Family Business

Choosing to be the successor of a family business is a significant responsibility and should not be a decision that you make based on everyone else’s expectations. Here are some important factors to think about before stepping into this role:

1. Personal Passion: Evaluate your personal interest and passion for the business and its industry. Running a business can be demanding, so it’s crucial to have genuine enthusiasm for the mission of the organization.
2. Skills and Competencies: Assess your skills and competencies to determine if you have what it takes to run the business successfully. Consider areas such as finance, marketing, operations, and sales. If you know you lack certain skills, ask yourself if it is an area you can strengthen through training or if there is someone in the company who you can lean on for that area of expertise.
3. Family Dynamics: Reflect on the impact of working with family members. Consider the dynamics, relationships and potential conflicts that may arise. It’s essential to establish clear communication channels and define roles and responsibilities to maintain harmony.
4. Financial Considerations: Evaluate the financial implications of taking over the business. Assess the profitability, cash flow, debt obligations and potential for growth. Understand the financial risks and rewards involved.
5. Market Analysis: Conduct a thorough analysis of the market and industry trends. Understand the competitive landscape, customer preferences, emerging technologies and potential opportunities and threats. This analysis will help you identify areas of growth and potential challenges.
6. Support Network: Do you have a strong support network including mentors, advisors, industry professionals and business associations? You will need trusted people to provide guidance and encouragement.
7. Work-Life Balance: Consider the impact of running the family business on your personal life. Running a business can be demanding and time-consuming. Assess your ability to maintain a healthy work-life balance and manage stress effectively.
8. Personal Growth and Development: Reflect on your personal growth aspirations and opportunities for development within the business. Consider if the family business aligns with your long-term goals and if it provides the platform for your professional advancement.

Although there will be a multitude of other factors, we feel these 8 topics are a great starting point when you consider if you should take over the family business.

An Outside Partner Can Bring Clarity

Even after considering the factors above, you may be quite overwhelmed by the decision you have in front of you. It would not come as a surprise if you had a lot of doubt about your ability to successfully fill the top leadership role.  For this reason, an outside partner can be a huge relief.  The benefits of bringing in a third party, with expertise in this area, can provide the clarity that you are seeking.

As an executive search firm, Centennial can give you advice that stems from decades of interviewing and evaluating candidates for key leadership positions.  By enlisting our services, you and your organization can feel confident about the future leader of your family business, whether it is you or someone else who is identified during the search.

In the following section, you will see that conducting a formal executive search can lead to at least four benefits.

Benefits of Being a Candidate in a Formal Executive Search

When you, as a top contending family member, participate as a candidate in a formal search process conducted by a search firm, you receive at least four benefits:

1. Like all the top candidates, you are given a thorough interview to evaluate how you stack up to the qualifications that have been outlined by the family business. This interview gives you an unbiased look at your strengths and weaknesses as it relates to the criteria that have been laid out.  Having this feedback can better inform you about your ability to do the job well.
2. If you stand out as the top candidate, you will have gained the confidence and support of senior management. Having gone through the process and been recognized as the top choice will further bolster your credibility in their eyes.
3. If you stand out as the top candidate, you will gain the personal reassurance that you are an excellent choice to lead the company forward.
4. If you have any doubts about your interests and abilities, the search firm can be a neutral party to help lead discussions about your candidacy.

Clearly, taking over the family business is not a decision to take lightly.   We hope this information can help you sift through the emotions and the unknowns in order to make a confident decision about your future.  If you need additional help, please reach out to us and we’ll talk through your unique situation.