Expert Advice: Succession, Why your Children may not want to Follow in Your Footsteps
Our Expert Advice series throws the spotlight on family succession, a tricky and sometimes emotional subject
Our core advice to parents considering passing their business on to their children must first have open discussions with them about their aspirations and whether they are interested in continuing the family business. If they are it’s vital to involve them early, provide opportunities for them to learn the relevant skills, and ensure the company can adapt to current market conditions.
However, there are a number of reasons why your children might not be so keen to take over the business. Understanding these factors enables parents to make more informed decisions about the company’s future. Here are some common reasons:
Different Interests and Passions
Gone are the days when the family trade was automatically passed from father to son. Children often have their own interests and career aspirations that may not align with the family business. They might want to pursue careers in fields that they are passionate about, which could be completely unrelated to the business you have.
Pressure and Expectations
The expectation of taking over the family business can create immense pressure. Your children might feel overwhelmed by the responsibility and fear of not living up to your achievements. This can deter them from wanting to step into those shoes.
Desire for Independence
Many young adults seek independence and want to carve out their own path. Taking over the family business might feel like they are living in their parents’ shadow, which can be unappealing for those wanting to establish their own identity.
Work-Life Balance
Managing a business often demands long hours and personal sacrifices. The rewards are great, but so are the challenges and they may simply not want that for themselves or their own family.
Lack of Interest in Entrepreneurship
Not everyone is interested in or suited for entrepreneurship. Some children may prefer more stable or structured career paths.
Economic and Market Changes
The economic landscape and market conditions may have changed significantly since your business was founded. Your children might see limited growth potential or increased risk in the current market, making the business less attractive.
Skills and Expertise Mismatch
The skills and knowledge required to run the business might be very different from what your children have learned or are interested in. They might feel ill-prepared or disinterested in acquiring the necessary skills.
Family Dynamics and Relationships
Managing a family business can create complications in personal relationships. Potential conflicts with siblings or parents regarding the direction or operations of the business can be a significant deterrent.
Financial Considerations
If the business is struggling or needs significant investment to modernise or expand, your children may be reluctant to take on the financial burden.
Globalisation and Mobility
In today’s world, young people have more opportunities to work and live abroad. They might prefer to explore these opportunities rather than being tied down to a family business in one location.
A personal reflection:
A few years ago, a high-profile businessman from Dragons’ Den approached me to join a founding team for a new company in Mayfair, London. Three months after we started, my son, Josh, graduated from Brunel University. He had worked with me during the summer at my previous company and excelled, so I offered him a temporary position with the potential to be permanent. Josh joined and did well, but after six weeks, it was clear he wasn’t enjoying it. When we sat down and talked, he said, “Dad, this is just not for me.”
This reminded me of a previous meeting with a mother and son. The son had taken over the family business when his father fell ill, despite not wanting to. He ran it successfully for over 15 years, but admitted he never wanted to run it. His story made me vow never to put my children in that position.
So, I told Josh he should pursue what he loves. He now works happily in sports management. I’ve shared this story at seminars and often see knowing smiles between parents and children.
My advice to any parent is: don’t assume your children will want to follow in your footsteps. Although they may share your entrepreneurial spirit, they may not share your passion for your business. It’s important to let them pursue their true interests, even if it means working elsewhere.
This also means that your carefully planned exit strategy may not now involve passing the business on to your children. Don’t be disappointed if this is the case. Selling your business and using some of the proceeds to fund a more exciting opportunity for your son or daughter may be the best solution for you and your family.
Entrepreneurs Hub is a corporate finance company helping UK business owners sell their businesses smartly. Learn more from attending our free webinar on selling your business for maximum value or contact us to discuss how we can help you.
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FAQs – Selling Your Company
How do I sell my business in the UK?
Selling a business in the UK typically involves preparing financial information, obtaining a valuation, identifying suitable buyers and negotiating the terms of a sale. Most owners work with an M&A adviser to manage the process confidentially, approach qualified buyers and maximise the value achieved.
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
What is my business worth?
A business is typically valued by applying a multiple to its sustainable profit, often EBITDA or adjusted net profit. The appropriate multiple depends on factors including growth, recurring revenue, customer concentration, management strength, owner dependency, market conditions and buyer demand.
Determining what your business is worth involves more than applying a simple formula. Use our Business Valuation Calculator to obtain an initial valuation range, or read our simple business valuation guide to understand the factors buyers consider.
How long does it take to sell a business?
Selling a business in the UK typically takes around 12 to 18 months from initial preparation to completion, although some transactions may be quicker or take longer. The timeline depends on business readiness, buyer demand, deal complexity, due diligence and how quickly the legal terms can be agreed.
Preparing accurate financial information and organising key documents in advance can help reduce avoidable delays. Read our complete business sale timeline to understand what happens at each stage.
When is the best time to sell a business?
The best time to sell a business is usually when it is performing strongly, its future growth is clear and you are not under pressure to complete a sale. Buyers are generally more attracted to businesses with rising or stable profits, reliable financial information and credible opportunities for further growth.
Business owners are often in a stronger position when:
- Revenue and profits are growing or consistently strong
- Financial records are accurate and up to date
- Future growth opportunities can be clearly demonstrated
- The business is not overly dependent on the owner
- There is a capable management team in place
- The owner has started preparing well in advance
Market conditions can also affect buyer appetite and valuation. Factors such as sector growth, access to finance and competition between buyers may support stronger deal activity, but preparation and business performance are usually more important than trying to identify a perfect month to sell.
Ultimately, the best time to sell is when both you and the business are ready, and the company can demonstrate sustainable performance and future value to potential buyers.
Use our Exit Readiness Tool to assess how prepared your business is, or read our guide on when to sell your business for further guidance.
Do I need an adviser to sell my business?
You are not legally required to use an adviser to sell your business, but many owners appoint an experienced M&A adviser to help manage the process. An adviser can prepare the business for sale, identify and approach suitable buyers confidentially, coordinate negotiations and support the transaction through due diligence.
The right adviser can also help create competitive tension, protect your time and reduce the risk of avoidable mistakes. Read our guide to choosing the right business sale adviser to understand the different types of support available.
How do I prepare my business for sale?
Preparing a business for sale involves strengthening its financial performance, reducing risk and making sure it can operate successfully without heavy reliance on the owner. Buyers will also expect accurate financial records, clear contracts, organised documentation and evidence of future growth.
Preparation should ideally begin well before approaching the market, giving you time to address weaknesses that could affect value or delay the transaction. Use our Exit Readiness Tool to assess how prepared your business currently is.
How is confidentiality protected during a sale?
Confidentiality is protected through controlled information sharing, anonymised buyer approaches and non-disclosure agreements. Potential buyers usually receive limited information at the start of the process and must sign an NDA before commercially sensitive details are released.
Prospective buyers should be assessed before receiving further information, with documents shared gradually according to their level of interest and credibility. A well-managed process also allows the business owner to retain oversight of who is approached and what information is disclosed.
What documents do I need to sell my business?
The documents needed to sell a business commonly include financial accounts, management information, forecasts, customer and supplier contracts, employment records, tax information and evidence of intellectual property ownership.
Buyers may also request details of property, insurance, legal disputes, regulatory matters and company ownership. Organising this information before due diligence begins can reduce delays and help maintain buyer confidence. Our Business Sale Due Diligence Checklist explains the main information buyers are likely to request.
What’s the quickest way to sell a company?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
What’s the best way to sell a business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…
How can I increase the value of my business before selling?
You may be able to increase the value of your business by improving sustainable profits, developing recurring revenue and reducing reliance on individual customers or the owner. Buyers also value capable management teams, reliable financial reporting, scalable operations and clear opportunities for future growth.
The earlier you identify the factors affecting value, the more time you have to make meaningful improvements. Use our Business Valuation Calculator for an initial indication of value and our Exit Readiness Tool to identify areas that may need attention.