“A lifetime of building an empire can fall in a day because of the wrong successor to the empire.”

– Kailin Gow

Building a family business takes a lifetime of hard work, struggles, and sacrifices. However, all this can be destroyed in the blink of an eye if everything is passed down to an unfit successor. Handing over the running of a family business is a stressful affair. After all, it is not only the business that is passed down but also the legacy of generations. The transitioning of the leadership and ownership of a family business goes smoothly in some cases. However, most of the time, succession planning is a fraught topic because it compels families to confront deep issues like mortality, legacy, and, most importantly, power dynamics. Then, there are times when the next generation is either not willing or is simply unworthy of taking on the reins of the business. 

Nevertheless, succession planning is important to ensure the long-term survival of a business.

Let us look at what our experts have to say on the unique challenges that family-owned businesses have to face when it comes to succession planning. If you want to know how to overcome these challenges, our experts are here to offer their valued suggestions.

Document Daily Operations For Smooth Family Succession

Getting our restaurant ready for my kids to take over has been a scramble. The real challenge isn’t the menu, it’s the small stuff, like who calls the fish guy on Monday. We started training them on everything years ago. Forcing ourselves to have family meetings, even when we didn’t want to, stopped a lot of fights down the road. Write everything down and talk constantly. That’s what saved us.

Allen Kou, Owner and Operator, Zinfandel Grille

——————————————-

Early Mentorship Preserves Expertise in Family Construction

Handing down a family construction business is tough, especially when all the critical know-how lives in someone’s head. We started writing everything down and created a mentorship program, pairing the next generation with our own veterans and some outside experts. This let them run complex utility projects on their own. My advice is to start early. It gives them real authority and keeps our partners and clients confident in us.

Brian Tetreault, Co-Founder, Kitching & Co. Dirtworx

——————————————-

Clear Client Communication Prevents Mid-Case Transition Issues

Changing lawyers mid-case at a family firm is tricky. We made it a rule to call each client and get their written consent before any switch. It’s not just about ethics, it’s about showing them we’re not hiding anything. Seriously, just be clear with people and write everything down. You’ll avoid a ton of trouble later on.

Ramiro Lluis, Managing Attorney, Lluis Law

——————————————-

Structured Introductions Build Trust With Longtime Clients

Bringing your kid into the family real estate business can be awkward with longtime clients. I’ve found that having them tag along on a few property walkthroughs first helps everyone get comfortable. For us, setting clear goals and writing down who does what stopped any talk of playing favorites. My advice? Have those conversations early and get everyone involved. It just makes the transition less of a headache for everyone.

Mike Wall, Founder/CEO, We Buy Gulf Coast Houses

——————————————-

Co-Listing Eases Client Transition in Family Firms

Taking over clients from your parents in real estate is tricky. Here’s how we handled it. My successor started co-listing with me. It wasn’t an overnight fix, but clients appreciated seeing us both involved. It put them at ease that things weren’t changing suddenly. My advice is to give the relationship time to transfer, not just the listing itself. People matter more than properties.

Peter Kim, Owner, Odigo Real Estate Club

——————————————-

Written Plans Protect Both Business and Family

The family-owned business is often faced with a challenge in passing the leadership to the next generation because of the immense role emotions play. Parents might be unwilling to give up power, whereas offspring may feel the pressure to conform or feel insulted by comparisons to the ancestor. In some cases, the appointed heir might not be experienced, which creates tension among the family members who consider themselves ignored.

Effective communication will help to eliminate confusion about future roles and ownership. It is also beneficial that younger members of the family should gain some external working experience before coming back with new competencies and confidence.

An effective transition is made easier with a written succession plan and open conversations about the duties and the time frame, which protects the business and family relations.

Saneem Ahearn, VP of Marketing, Colorescience

——————————————-

Early Inclusion Transforms Succession From Loss to Growth

The issue typically isn’t identifying who’s next, but more of what you want the next generation to be. A lot of founders have a hard time letting go or worry that those who follow won’t be as passionate or hold the same core values, values that built the business in the first place. Without structure, succession is a taboo topic until it’s too late. What can be helpful, is treating it like A PROCESS and not a moment. Leadership succession discussions need to start early, along with training and mentorship — and clear documentation of systems that conserve what works but leave room for innovation.

The future of any business is about TRANSFERRING KNOWLEDGE AND CULTURE. I began including younger family members and key group leaders in decision-making well before any formal transition phase. When digital personalization and new product lines, for instance, were introduced by me, I did invite them to shape the test and customer engagement aspect of that. It gave them a degree of confidence, and it gave me clarity. The best succession plans balance reverence for the past and space for evolution. A family business that can come to see a transition in another light — as growth, rather than loss — is far more likely to remain standing after several generations.

Aleksa Marjanovic, Founder and Marketing Director, Eternal Jewellery

——————————————-

Build Successor Credibility Years Before Transition Begins

Finding someone to take over Comprehensive Pet Therapy was hard. How could they earn the same trust with clients and in court? We solved it by spotting talented trainers early and pushing them into competitions. The wins and titles did the work for us, building their reputation piece by piece. Honestly, you have to start this process years before you actually need it.

Mark Spivak, Founder, Comprehensive Pet Therapy (CPT)

——————————————-

Merit-Based Succession Creates Smoother Family Business Transitions

Succession planning for family owned enterprises is frequently especially challenging, as in many cases emotion and legacy cloud strategic view and considerations around entitlement to ownership. The greatest challenge I have observed is the dichotomy between TRADITION and GROWTH — members of the older generation may want to maintain, while younger generations prioritize modernization. This tension can also result in procrastination on decisions – particularly when discussions around leadership succession get personal. And there’s the danger that informal agreements will replace formalized plans, which can lead to confusion later. The secret is to perceive succession not as a transfer of power, but as an organic TRANSITION of ideas, leadership and destination.

When I began trying to scale my motorcycle rental marketplace, I saw the same in a few of our local operator partners who were family businesses. What they did right — and what I personally apply in my own planning for succession—is to create a SUCCESSION ROADMAP early, allocate roles based on merit, and create mentorship so that the next generation learns by doing rather than assuming roles. The regular business reviews and transparent governance also make the decisions more decentralized.

Carlos Nasillo, CEO, Riderly

——————————————-

Outside Advisors Bridge Generational Business Differences

The hardest part of our family business is balancing my dad’s old-school ways with my brother’s new online ideas, especially when figuring out who takes over. We brought in an advisor, which helped because he wasn’t one of us. We just had to sit down and write it all out, who does what. That avoided a lot of fights later. My advice? Start these talks early and get it on paper.

Brandi Simon, Owner, TX Home Buying Pros

——————————————-

Document Decision Logic, Not Just Business Numbers

Working at 614 HomeBuyers taught me that messy property records can stall a leadership transition for months. We used to just hand things off and hope for the best. Once we started logging everything in Dataflik.com and walking new partners through our actual lending contacts, things changed. You can’t just show them the numbers, you have to explain the thinking behind each deal. That’s what made our last handoff actually work.

Brooks Humphreys, Founder, 614 HomeBuyers

——————————————-

Written Rules Prevent Emotional Property Decisions

Running our family business taught me something tough. We get attached to buildings we’ve fixed up ourselves. That made passing things to the kids complicated. We had houses we loved working on, and houses that actually made sense for the business. The solution was simple but hard. We wrote down rules for when to sell. Now my kids won’t have to guess what we were thinking. They’ll have our reasons right there.

Sean Grabow, Owner, Central City Solutions

——————————————-

Formalized Governance Prevents Family Business Succession Drama

The first of the key challenges for family-run businesses is planning for succession. It’s not just a business decision to pass the baton from one generation to the next. It’s about as personal as it gets. I’ve seen families in anguish over the founder’s inability to really let go, or heirs struggling under the weight of expectations they must fulfill in living up to a legacy. Open communication is key.

Family dynamics and business acumen can be treacherous. Emotions can muddy the waters when it comes to decisions about siblings or in-laws. So I would always recommend that somebody put in place some kind of formalized governance — job descriptions, standards, or performance measures that are explicit and objective, and outside advisers who can get involved on your behalf dispassionately.

Arsen Misakyan, CEO and Founder, LAXcar

——————————————-

Shadow Boards Build Trust Before Full Business Handover

For me, the unique challenge in family businesses is often the ‘sweat equity’ mentality of the founders – the idea that because I built it, I always know best. It’s like renovating a property, you have to know when to let the new designers put their own fresh vision on it. My approach is to set up a ‘shadow board’ where the next generation makes decisions for a segment of the business, with all the real financial consequences, so they earn their stripes and I can trust their judgment before the full handover.

Gene Martin, Founder, Martin Legacy Holdings

——————————————-

Business Valuations Create Fair Family Inheritance Plans

With four kids of my own, the a major challenge is wrestling with what’s ‘fair’ versus what’s ‘equal’–not every child may want to, or be suited to, run the business. My plan is to treat the company like one of my real estate deals: I’ll get a formal business valuation, just like a home appraisal, and use other assets in my portfolio to create an equitable inheritance for the children who aren’t involved. This protects both the business and family harmony by ensuring the company isn’t crippled by being split up.

Ryan Hall, Founder & President, Coastal NC Cash Offer

We’d love to hear your thoughts!

Share your insights in the comments below:

• What part of this article resonated most with you?
• Did anything in the post challenge your perspective?
• How would you apply the ideas from this article in your own life?

Disclaimer

The insights shared in this article are for informational purposes only and should not be considered legal, financial, or professional advice. Please consult a qualified expert for personalised guidance. The links provided are for convenience purposes only, and we do not claim responsibility or imply endorsement. For more details, please refer to our Full Disclaimer, Privacy Policy, and Terms of Service pages.