Q. I’ve run a successful textiles company for the past 25 years but would like to step away from the business later this year. Ideally I’d like to keep the business in the family and have my 27-year-old son become a director. How do I decide if he’s ready to run the business?
 
Jim Rogers of Grant Thornton writes:

You are asking one of the most fundamental questions surrounding the transfer of the business from one generation to the next. You need to be very sure about what you mean by ‘stepping away’. Are you looking to transfer management responsibility for the business and retain ownership or are you looking to transfer ownership of the business at the same time as transferring management responsibility?

There is nothing in the question to suggest the quality of the relationship between you and your son. You need to consider what your son wants. Difficulties between parent and child are exacerbated when they are in business together. It is very difficult for a son to emancipate from his father when the two work together. From a business perspective, the son almost always has some independent ideas that differ from the father’s, if for no other reason than a generational perspective.

Conflict can occur if the parent is reluctant to give up the reins and wants to continue to run the business, ignoring their child’s desire to take control. As a result, the ambitious child may, after years of trying to introduce their own ideas and initiative into the business, decide to leave the business altogether, which is exactly the opposite of the parent’s wishes.

In order to make a success of the business, your son will have to be able to effectively carry out the following three key tasks:

• Run the day-to-day business operation well

• Ensure that business improvements are carried out to make the company work more efficiently and effectively

• Develop a business strategy to ensure the business is heading in the right direction Your son, with your support, needs to assess and develop his leadership and management skills.

And when the time is right, the mature decision is to invite him to take charge of the business. Establish a fixed period within which you will step aside and allow control to pass over. This needs to be done in an atmosphere of trust and transparency, where you can express your views and wishes and your son can do the same. Working together to agree a plan for succession, be it management and/or ownership, with support for you both (which may include an interim manager/director) to move into your new roles, is a good place to start.