Taking Over Your Family Dealership? Here Are 3 Habits That Have Proved That Make A Successful Successor
Is your dealership a family business? Many are. Family-run businesses pose special challenges when it comes to succession, and that’s as true for those of you selling heavy duty trucks or construction equipment as it is for companies in manufacturing or the apparel industry. How can you ensure taking over the family dealership is a lasting proposition?
It takes planning and foresight. Although about 80% of American businesses are family-owned, fewer than a third survive transition to second-generation control and barely over 10% make it to the third generation. That doesn’t mean your dealership is doomed, it simply means you have to take action to ensure you choose and nurture a successful successor.
The Harvard Business Review warns that family businesses commonly put succession transition in jeopardy by implying there are guaranteed jobs for the next generation. Why is this a problem?
- Much as you’d love to have a family member take over, you don’t want them to do it out of a sense of obligation because their heart just won’t be in it. Your dealership will likely flounder.
- Your offspring could consider working at the dealership as an entitlement or a last resort – a sure thing in case their “real” career efforts don’t pan out. In this scenario, by the time they actually come into your business, they will be wholly unprepared to manage knowledgeably yet they will expect to “lead” because of who they are.
- Not all members of your next generation are necessarily a good choice to take over the reins of your dealership when the time comes.
No matter what, you can’t hire everybody. And to ensure successful succession, you should have the highest expectations of family members being considered to take over.
Here are some steps you can take to assure that happens:
- Expose them to your dealership’s working environment at a young age, so they can determine their level of interest in a career there.
- Treat them as you would any other employee, in terms of job expectations and performance assessment. If you’re grooming them for the top spot, make sure they get to work in all aspects of your dealership, not a single-track experience, so they’ll be able to see and understand the big picture.
- Best practices for today’s multi-generation family businesses include setting minimum requirements for any child that wants to work with you – a college degree, possibly a graduate degree in business or finance and experience working in some other company, including receiving a promotion or two.
- Be objective. You may love them, but if they aren’t cut out to be the next CEO, you’ll all be happier if they pursue a career elsewhere.
Family business experts note there are three traits that indicate a successful successor:
- The ability to objectively assess the marketplace and your dealership’s place in it. Today’s business environment is entirely different than a generation ago, and it will be entirely different in new ways for the next generation. Business as usual won’t cut it.
- Willingness to embrace new technologies. No business can thrive any more without staying on the leading edge of tech-related change. You can’t be seen as a leader by your customers and prospects if you can’t show them the way. The latest technologies should already be an integral part of marketing and managing your dealership.
- Willingness to share the helm. Sometimes it takes new blood, in the form of non-family-members, to bring a fresh perspective and leadership talent to ensure your dealership has the brightest future.
Taking over the family dealership should be a matter of pride, but it has to be based on preparedness. Today’s tougher-than-ever business environment won’t support anything less, and you want your dealership to continue thriving and growing, not barely survive the transition. You’ll be confident of that if you take steps now to prepare a successful successor.