Wondering when your parents are going to retire and sell the family business? That’s natural, because you have a lot of questions about your future as well as theirs. But I strongly advise an alternative approach to asking the potentially-prickly question, “When are you going to retire?”
I’ll get to a more preferable tactic in a moment. But first let’s talk about why it’s so difficult to discuss your parent’s transition out of their role of family business owner.
According to Paul Cronin of the Successful Transition Planning Institute (STPI), “The hardest part of the whole process is that the kids are adults, the parents are adults, but the parents don’t think of kids as adults.”
STPI helps people nearing their retirement age successfully transition into the next stage of their life by establishing a vision for the future. Cronin has seen the intransigent parent situation countless times, and warns things will only get worse if you ask, “When are you going to retire?”
This question immediately puts your parents on the defensive, and will generally inspire the typical response, “There will be plenty of time to do that later.”
In most cases, that denial of the inevitable usually results in disaster. Many parents in family businesses won’t even deal with the issue.
The result is a huge mess if a parent passes away unexpectedly and there is no succession plan in place. So what can you, as a child, do to inspire planning for a strategic transition?
Taking the Right Approach
Cronin shared with us these smart tactics for getting your parents to take the next step, whatever that step may be.
1. Ask the right questions.
Don’t put your parents on the defensive. Give them the space they need to be firmly in control, yet ask the kinds of questions that will prompt them to act as the businessperson they are. Consider the following:
“When you think about your long-term goals for the business, what will it take to make that happen?”
“If you want the business to keep growing for decades, what will be our strategy and how will we accomplish our goal?”
“If you envision leaving the business someday, what would it take to create that path? What has to happen for you to be comfortable enough to find a new owner?”
“If something were to happen to you today, what should we do to keep the business running strong?”
All of these questions are framing future planning in terms of the business, even though ultimately it leads to making decisions that will impact the entire family. Cronin notes any approach should accompany the statement, “If you’re not here, these decisions will fall on me, and I want to do right by you."
2. Hire a lawyer now so you don’t have to hire one later.
If you want your parents to start thinking about the future, it’s imperative that you get a lawyer involved to help flesh out the details of the process. Cronin has heard countless stories about people who try avoid getting legal help and suffer the consequences. Here’s an example:
A father had run a successful medical practice, and was planning for retirement. He was planning to pass the business on to a protege, who happened to be his son’s good friend.
The father and the protege had developed a loose plan, based on a handshake agreement. However, as they progressed further in the transition, the plan began to fall apart. The details proved vexing and sparked disagreement, and soon the two were in conflict.
Soon the son was asked to mediate the situation, putting him in a lose-lose situation.
This all could have been avoided if the father and the protege had done some upfront planning, with the assistance of a lawyer. It’s a situation that commonly occurs in strategic transitions: The parents put off making plans and decisions, and the kids are left to clean up the mess.
In the LaManna family (I have 10 brothers and sisters), hiring a lawyer assured us that none of these details would be left to chance.
3. Keep Pushing for a Vision of the Future.
If your parents rebuff you, don’t give up. Keep asking them about their vision of the future for the business, and for their own retirement. We’ve blogged in the past about how helping a business owner envision their own retirement will create as successful transition.
4. Consider how to best approach your parents.
Your family dynamic will dictate how to best approach your parents. If your family is very open about matters, you may be able to bring up the topic face-to-face.
If your parents have difficulty dealing with change, consider writing an email or a letter posing some of the questions we’ve listed above. Give them the space they need to process what you’re asking, and then wait for them to respond. Eventually, this will lead to a discussion of the situation.
Know going into this that the entire process won’t be blissful, and some tough decisions will need to be made. If you still are getting no response from your parents, you may want to confront them with some of your own personal fears, such as:
“Mom and Dad, I’m really worried that if we don’t plan for the future, that in the end I will be left with a difficult mess to clean up. I’d rather not remember you for the pain that will result from the mess, and instead all the joy and love you gave me throughout my life.”
In my situation, we hired a family business consultant to help facilitate some of these difficult conversations. I can’t emphasize enough how beneficial that was.
You’ll need to be strong to say these things, but in the end, you will receive thanks from your parents and establish a future of positive memories. It’s a long-term gain that far outweighs any short-term pain.