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Omaha, NE— The issue of business succession planning is looming ever larger for many independent jewelers, as the majority of independent jewelry stores in the United States are owned and managed by people of the Baby Boom generation, which is now in its 50s, 60s, and early 70s.

For those family business owners lucky enough to have “next generation” kids who are already part of the business and willing to someday take over, succession itself may not be an issue, but typically many handover questions remain. Not surprisingly, there are many, many articles and books devoted to this topic. Here, we offer a checklist of top-line things to think about for those getting started on the road to business succession.

Traditionally a succession process has revolved around the transaction itself. But effective succession starts a long way before any transaction, and begins with the all-important transition of management. Is your family successor sufficiently skilled and experienced to continue to build business value or does the family risk erosion of business value?  Does your successor have the appropriate management style to grow, motivate, and build your store team?

If the answer is ‘no’ to either question, you may want to build a grooming plan for the successor, including desired outcomes and measures to monitor progress. The grooming plan for your successor would look something like this:

1. Make sure you are truly ready to retire!
2. Groom the business, so it is ready for the next generation to take it over successfully. Make it the healthiest possible, to give them the best chance to thrive!
3. Call a family meeting to discuss the succession. Respect, compassion, and discretion are all key elements of these conversations.
4. Are there other family members not in the business that need to be considered?
5. Clearly define each family member’s role moving forward. Take into consideration their strengths and weaknesses, so both they and the business are set up to succeed. Keep leadership, professionalism, and communication skills in mind.
6. Set up an organizational development chart.
7. Create employment contracts.
8. Talk about money and inheritance. Don’t avoid these topics!
9. Work with an independent advisor to help with these plans and conversations if needed.

The inter-generational family succession is not a quick process, but needs to reflect the compromise between the founder’s aspirations and “next generation” expectations with a series of specific actions. Remember, too, that some of the issues that might have caused conflict between older and younger generations—such as selling online—can be the very things the business will need to survive in the future.

(Editor’s note: Further reading about generational transition planning can be found here, here, here, here and here.)

As advisors to independent jewelers, the Edge Retail Academy team take a collaborative approach that includes interviewing family members from both generations. We assist the Founder generation and consider and define a series of guiding principles designed to clarify their thoughts on management transition, phase down scope for the founder leading up to a transition with detailed funding plan attached. If you would a complimentary conversation about your succession plans or feel you need some additional strategies to help you achieve the best outcome in your succession planning, please reach out to The Edge Retail Academy, and we can help!  Contact Becka Johnson Kibby at Becka@EdgeRetailAcademy.com or 1-877 569-8657, Ext. 1 today.

Top image: familyownedbusinessadvisors.com