Children of family business owners can feel enormous pressure in deciding whether to join the company or go it alone. Here are some tips for making succession planning a smoother experience:
Create a communication forum
Family business owners are often domineering during the process, said Grant Walsh, director of KPMG's Centre for Family Business: "They tend to want to prove to their children that they're wiser and they're older and they know what they're doing." For neutral advice, the Canadian Association of Family Enterprise (CAFE) runs small advisory groups and recommends family-business counsellors.
Know that other families are in the same boat
Mr. Walsh's clients are often shy. "They think that if they have a dysfunctional family … that's unique to them and they're kind of embarrassed by it." The reality is quite the opposite, he said.
Set up a formal plan
Ninety per cent of family businesses don't make it to the third generation, Mr. Walsh said, but having the second generation go through a formal succession plan can improve those odds. Seek outside advice and set up a formal transfer.
Tim Kiladze