- by Sophie Pinkoski

According to Deloitte, 64% of family businesses have no succession plan in place. It can be easy to put off such plans when the head of the business expects to carry on leading for the foreseeable future. Yet when this happens, they fail to prepare the family for crises such as sudden accidents, illness, or even death. This necessitates selecting a successor and developing their leadership skills to facilitate their transition into the leadership role. As painful as it is to think about such eventualities, going without a succession plan can leave the family scrambling in the instance of an unexpected transition. No one wants the surprise of suddenly running the family business when no former plans have been put in place to support them. It leaves them under prepared to take on such a huge undertaking. Not only do they have to grapple with this new responsibility, they will likely be going through a period of grief.

Managing the complexities of getting to know the ins and outs of the business while in a state of grief can be emotionally taxing and may lead to rushed, impulsive decisions.

It’s important to take on this new unexpected role with patience, breaking it down into more manageable pieces.

Lean on the experts in your life who know the business best. Remember, you don’t have to do these next steps alone. You’re not expected to know everything right away. Get to know the intricacies of the business before making any big decisions. But once you have the information in place, you have some options ahead of you. You can choose to keep the business, sell, or restructure for long-term sustainability. Whatever you choose, you will want to weigh the risks and opportunities of each option first. This is something you will likely want to discuss with your family to gauge their feelings about the future of the business. Consider what your family can handle emotionally and financially right now. You will be making these decisions not just for you, but the business and your family as well.

Making informed decisions about your family's business isn’t easy. Here are key logistics to consider when weighing your options for what to do next:

Take stock in the aftermath–– Assessing the state of your family’s business is going to be overwhelming. Many different considerations must be made before making any big decisions. Start with identifying the actual state of the business. Many family members have the unfortunate surprise to find that the business is not as described by their loved ones.

Legal documents, financial statements, insurance policies, and key customers and suppliers, among other records will all be crucial in determining the next steps for the business.

Each detail you uncover adds up to paint the big picture of what information can be factored into your decision making.

Lean on your support network–– Building your support network will be key in making necessary decisions in the coming months. This is where experts, mentors, and advisors will help you navigate through this. Your business’ trusted advisors such as accountants, lawyers, and investment professionals can help you comprehend the financial and legal details that contribute to your business’ health. The experts already involved with the business will know it well and can make recommendations for what the business needs most. You can also seek fresh perspectives with other professionals such as business valuators or business strategists to understand the state of the business.

Everyone must be aligned on your intentions for the business.

Your family business may already have an advisory board, but if this isn’t the case, it may be the time to put trusted advisors in that position to best aid your decisions in more formal and structured way.

Promote stability and continuity–– The business doesn’t stop with the loss of its leader. It’s up to you now to keep operations running as normally as possible through this sudden period of transition. Your team and stakeholders will be concerned about the fate of the business as they settle into a phase of uncertainty. Put their minds at ease by clearly communicating your intentions to maintain continuity as much as possible. Your employees will want to be reassured that their role hasn’t been compromised in the transition. Some of them will be crucial players in the business’ transition. They will be the experts and knowledge keepers of the business who can help you maintain day to day stability. The last thing your business needs is further disruption.

Keep a clear leadership structure and in the meantime, review existing processes, including workflow, technological systems and supply chains in order to assess potential areas of improvement for later.

Unexpectedly leading your family's business can be overwhelming, but you are not alone. By gathering crucial information and seeking expert support, you can navigate the intricacies of this challenge with confidence. No matter your choice, you have the resources to make a well-informed decision at your fingertips. With careful planning and the right team by your side, you can turn this unexpected responsibility into a sustainable path forward for you, your family, and the business itself.

Further Reading:

Surprise! You Just Inherited a Business, Venture First

What to Do When You’ve Unexpectedly Inherited the Family Business, SCORE

You've inherited a business. Now what?, Alan Brown

Death and the Family Business, The Family Business Consulting Group

Owner-manager when death do us part – roles of a widow in sudden succession in family firms, Journal of Family Business Management, Emerald Insight

Family Business Continuity: How to Secure the Family Legacy, Chartered Professional Accountants

A Family Business Challenge: How to Choose Trusted Advisors, LinkedIn

Loss and Continuity in the Family Firm, The Best of FBR II