For independent publishers looking to keep the legacy of their business alive, passing on their company to their children or other relatives may not always be the best idea.
According to Jennifer East of ONIDA Family Advisors INC., a family advisory firm headquartered in Toronto, thoughtful planning and bringing about future goals for the business is key to keep the company thriving under the direction of a new successor. East provided practical advice for publishing veterans looking to retire during an Independent Publisher’s session during the INK+BEYOND conference in Toronto on Friday, April 27.
During her presentation, East advised the audience of publishers on how to best prepare their businesses for sale and how to groom future shareholders for success.
She warned independent publishers looking to pass on the family business to their children and/or relatives about the risks involved such as a lack of knowledge, ambition and independence.
“There is this expectation that (the business) is going to work within the next generation,” East said.
Noting that many entrepreneurs pass on their businesses late or often exclude their future shareholders in their plans, she argued that publishers must develop a thoughtful plan prior to leaving the business.
Publishers have an obligation to help children and family members develop skills through coaching and mentoring, East says. “Potential successors should go through apprenticeships and work in other firms to gain the experience needed to help the business thrive.”
“The sooner you start, the more opportunity there is for the next generation to build opportunity and make the mistakes you made when you first started your business.”
However, East warns that t children and relatives may question whether or not going into the family business is the right career path. Raised in the family business herself, East said she felt obligated to follow the footsteps of her family members.
“I grew in a family where business is the air we breathe. We assume that family members will successfully take over the business,” said East, who currently, works with leading business and financial families in North America, Europe and Asia to implement family governance structures and building common goals amongst diverse family members.
But like any homegrown company, East says relatives may not be so open to following the same career path.
“It’s not easy to find yourself and live up to family expectations,” she said, noting that family members who are being considered to take over the business might want to pursue something else.