The Next Generation: Successfully Passing Your TAS to Your Kids

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderThe majority of family businesses aren’t successfully transferred to the second generation, and only about 15 percent make it to the third. There are many theories why.

A likely factor is that the second generation, who didn’t sacrifice to launch the business and see it through the lean, early years, lacks the resilience to persevere. Another reason is that problems occur if parents hand the business over too quickly to adult children who still lack experience.

Some entrepreneurial parents attempt to avoid these problems by making their successor children start at an entry-level position and work their way up the organization. But this fast-track status often backfires, causing resentment from non-relative staff who may be more qualified, better educated, or have longer tenure.

To circumvent this, some founders require their children to earn a college degree and put in time at another firm to learn essential skills before joining the family business. Although this approach offers the greatest chance for success, it’s not a sure-fire strategy.

Regardless, if your goal is to pass your TAS to your children, be intentional about it and plan. Don’t leave business succession to chance, or you may end up like the majority of family-owned businesses that fail to successfully pass the baton to the kids.

Peter L DeHaan is publisher of TAS Trader and Connections Magazine. Read other articles by Peter L DeHaan or receive his newsletter about writing.

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About Peter DeHaan

Peter DeHaan is the president of Peter DeHaan Publishing, Inc., (http://peterdehaanpublishing.com) the publisher and editor of Connections Magazine and AnswerStat, and editor of Article Weekly. Peter DeHaan’s personal website (http://peterdehaan.com) contains information and links to his blogs, newsletter, and social media pages.