Generational Transition, what's your plan/experience?

[VanKalkerFarms]

We are getting to the point of seeing if any of our 4 kids would want to come into the family business and then transition over time into partial ownership and eventually become full owners. (they still have time to think as the youngest is in 5th grade and the oldest a sophomore in College)

I bought out my parents fully 15 years ago and am 47 today.  I worked on the farm from 10 years old having actual job responsibilities, but as a larger part of the business from 18 it was my full-time job being 60+ hours a week. About 10 years before I fully took over, we sat down and laid out what we both were looking to do long-term, how a transition would take place, and how my sister who wasn't involved in the business would be affected.

I'm not sure exactly how to approach my kids as I just never thought of doing anything other than what my parents did.  My kids haven't really shown any larger interest in the garden center beyond us making them be cashiers in the springtime and our three bakeries, but they both can support multiple families with each business with free time especially if you are only doing one or the other.

So how do you approach a 16, 13, or 10-year-old and say hey, we want you guys to take over the business in the long term, but you need to start getting involved sooner than later.  I want them to take over as I know it is a money-making business that can support 2 families and it can even be evolved to be less hands-on if that is what they want as we currently do all of our own maintenance, upgrades, and repairs that could be farmed out.

So how have you approached introducing your children to your business and set up the long-term goal of transitioning to the next generation?

[CareyJo]

Our oldest is 35 and youngest is 23.  We have six and all have kids of their own.  Our kids don't want our business either.  It's harder to have that conversation with little kids because the future seems so far away to them.  With the older kids, I would start having conversations about "what do you want to do when you grow up?" and see how they answer.  The teenagers should already be doing that anyway because you need to know that before you register for freshman year of high school.  Asking that question will give you a lot of indication where they're at.

The other thing you could do is ask them what they would want to happen with the business if both of you passed at the same time unexpectedly.  Would they want the family to carry on?  Would they want someone to run it in your place until they're old enough to take over?  If you don't already have a life insurance policy, this is a good place to start with one because you'll need to know who you want to list as beneficiaries of that policy.  Our company owns our policies and in the event that we both die, that payout then goes to one of our boys who will use the money to settle debts and close it up.  If they are too young to have an opinion on this, then you definitely need to have someone outside your family who can step in, in a pinch to get through that situation.  Overall, this question isn't just about retirement, it's also about your legacy.

Our youngest son worked in our business while he was in high school and learned a lot but he doesn't want to do HVAC.  He wanted to be a diesel mechanic, so that's what he did.  Our girls didn't want to run a business, they wanted to be moms.  Our oldest son is ex-military, firefighter and EMT and in recent years, he's been doing construction but he doesn't want to learn the trade either.  We will end up closing our doors at retirement most likely.  I have a nephew that went to the same school my husband did, but his wife refuses to move to the cold, so we can't hand it off to him.  It's sad but reality.  We just keep hoping that when the time comes in a few years that we will have the best option available and know what we need to do.

[DeanInLondon]

As someone starting to take over my mom's business (I'm 27, she's 57), here's my personal experience.

My siblings and I were involved in the business from a young age (e.g. tagging along with my mom during business trips, paid to work there during the summer), but we weren't approached like you are envisionning it "hey, we want you guys to take over the business in the long term, but you need to start getting involved sooner than later."

The thing is, my siblings and I had our own ambitions. If you pressure your children to go into the business, or ask them to make a decision at such a young age, they might ressent you in the long run.

Even 16 is way too young, in my experience. I started uni at 17, and am now 27. I've had three changes of careers already. Not changes of programs. But careers: I fully finished my program, got a job etc.

They might resent you especially because each of your children are of different age, so the elders are further along knowing what they might want to do in the future, if you see what I mean.
I think a better strategy is to involve them in various different ways, without pressure. If they like it, they'll stick around, and there will be a point where you will naturally see who amongst your children (if any) are interested in taking over.

I actually now live in a different continent than my mom's business, but I remain actively involved in admin, tech and legal stuff since those things do not require me to be physically present, and I actually enjoy these things.
My mom saw me as the natural successor because my sister absolutely *hated* working there during the summer, whereas I was just interested in the admin/tech/legal stuff, which I also happened to got to uni for, but not because of the pressure of my mom.

You are 47... You and your children have A LOT of time.