During my consulting career with small and family owned businesses, I have been amazed at how many times an owner is in his/her sixties and have not thought of who will replace them. This is especially true in businesses where the owner does not have a relative interested in being in the business.
When should you begin your search for a successor. As soon as you can but not later than 5 years before your anticipated retirement date. Why because things change, times change and the economy changes and if you do not begin to groom someone to take over and something happens to you, what happens to your business. Or do you care? I have a friend who who owned several hotels/motels and various oil producing properties. He had 9 kids. He tried them all and none of them worked. He found out that his dogmatic "I am the king" attitude could not be replicated. So he got very frustrated and sold the business to a competitor this locking the kids out.
Another example is a CPA friend of mine who had built up a nice little practice. He met with his kids and none of them had the slightest interest in Accounting. He met with his top CPA's in the firm and agreed to transfer ownership over a 5 year period to that group. The transition is going very smoothly and because of his forethought and business style, by the time he leaves all the clients will be re-oriented to the new owners. They have agreed to have him stay for a year afterwards on a purely advisory basis.
What do you think?
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