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Planning your children’s entry into your business

By Adam Zuchetti
16 November 2016 | 1 minute read
Planning your children’s entry into your business

Hoping that your children will continue your hard work and keep your real estate business alive? Make the transition easier for them – and for you – with these practical tips.

CEO of Kennards Hire, Angus Kennard, was never pressured or forced to become part of the family business. He chose to join the company and ended up working his way up the ranks. 

Today, Mr Kennard says his business needs specific rules about succession and hiring family members to ensure both the business and the family remain on steady footings.

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“Often, when you’ve got a family business, it’s hard to separate the business from the family, and there’s not a family meeting that goes by that we don’t have conversations around business. I have them with my dad all the time, and they’re great,” he said.

“[But] there’s plenty of great businesses that have fallen apart not because of the business falling apart, but because the family has fallen apart.”

Mr Kennard said developing solid structures to pave the way for your departure, and making way for younger generations, goes a long way towards reducing family conflict and business stress.

This process took the Kennard family two years to achieve. During this time, the family devised and implemented a workable charter covering the company’s vision.

“I think it’s always easier for the next generation who are actually growing up in that process. It’s all they’ll have ever known,” Mr Kennard said.

Family rules 

He said Kennards Hire implemented these rules determining the entry and oversight of family members working in the business:

1. Prior experience “We have a rule that if you want to come into the business, you’ve got to work somewhere else for five years. Go and make mistakes on someone else’s watch, go and have to hire someone else or fire, or be fired, or be performance managed or get a job yourself. That’s a critical thing.

“It could be five years, it could be three years, it could be 10 years. We just felt it was enough time for you to have to stand on your own two feet.”

2. Skills-based employment “Coming into the business, family members only reach the level that they’re capable of, so there’s no priorities for family members as to where they can go.”

3. Independent lines of authority “It really shouldn’t be family members deciding [family promotions and appointments], it should be people within the business having independence about what level they can get to, whether [they are] suitable for the role and positioning them in the place that they’re going to have the best success.

“We have this rule that family members don’t report to family members because that can also cause a bit of a challenge, [but] with me becoming CEO, that’s posing a few challenges.”

4. Beacon of culture “If you’re going to work in the business, you’re carrying the flame of the family. [Identify] what are the behaviours that you need to enact to ensure you’re living the values, because as a family member, you’re a beacon of culture – people will look to you as what the highest rules are.”

Planning your children’s entry into your business
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