How to avoid the end of your family business after you leave as the CEO?
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The decision to leave the active running of your company to a CEO has a lot of implications, especially if you are running a family business. If this is the case you are going to have to make sure that you take very careful precautions so that your company can continue to survive as a family business.
The best way to avoid the end of a family business after you leave as CEO is make sure that everybody in the family is in agreement on the future of the business. This is fairly straightforward if they are going to continue to be the owners of the business but not involved in the actual running of it. In this case it is mostly just a matter of deciding how the ownership of the company will be divided after you die. While this can be unpleasant it is usually possible to come to an agreement.
A far bigger problem that you are going to face is that in most cases the company will need to reinvest the profits back into the business. As the founder of the company you are surely well aware of this. Your children however may view this as money that they are missing out on when they become the owners of the company. Therefore you are going to have to make sure that they are educated on just why it is necessary to make this reinvestment. If the business is going to be owned by more than one family member you are going to have to make sure that they are all in agreement about how much needs to be reinvested, this can be tricky.
Things become far more problematic if your intention is that the family members will continue to be actively involved in the company. In this case you are going to have to make sure that the family members are well trained for the jobs that they are going to have to do. You are also going to have to make sure that the CEO that you have hired understands that it is your intention that someday your children will take over running the company.
Even with these precautions things are going to be difficult, especially if there is more than one child involved. Only one of them is going to be able to run the company which is going to upset the others. It is important that you make sure that there is agreement about the roles that each child will play in the company. Even then you can expect that there will probably be fights and disagreements. This is why very few family companies survive the next generation and why you need to be prepared for the fact that yours may not either.