The process of letting go is often the most life threatening phase of the succession process – particularly in the building sector which is dominated by small family and owner managed businesses. A multi-year project, the succession process involves copious planning, strong leadership, good communication – and plenty of time.

Failure to prepare can be fatal for the business and disastrous for the family – not surprising considering the emotive issues to be addressed: do my children want to come into the business? Who will I choose? Who is best qualified to run the business? Would an outsider be better skilled and qualified? Would the family be better off if I sold the business? The process starts with identifying a successor, planning a career path that will ensure they gain skills, qualifications and experience relevant to the building sector outside of the family business. Alongside this, the founder should be gradually relinquishing control.

The stages in succession planning are well summarised by the family life cycle of four L’s:

• Learning business
• Learning the family business
• Learning to lead the family business
• Learning to let go

Learning Business: Starts as a child, which may include joining Dad at building sites or in the office, observing how the business is run. Likewise, the family business can often provide teenagers with their first work experience. However, after that, things need to change. There is a tendency for family to regard the family businesses as a guaranteed job source, or a ‘job for life’, regardless of capabilities and commitment.

This ignores the requirements of the business and the developmental and motivational needs of the individuals. In the competitive construction sector and the ever-changing business environment, success is reliant on maintaining the appropriate quality of staff at all levels with no leeway for ‘carrying’ individuals, family or not. External experience is also crucial for the growth of family member employees and the business, ensuring they can bring back new skills, ideas and perspectives, benefitting the business and earning them staff respect. I have seen family business clients ‘sack’ family employees to force them into outside employment to gain these benefits.

Learn the family business: After external work experience, it should be made clear that a family successor is only to be employed on merit and in positions that they are qualified to occupy. Remuneration should be equivalent to non-family employees and appraisal and promotion procedures and guidelines applied the same as any other staff member. Their future real authority will come from the respect they have earned rather than the shares they have inherited. Mentors may be helpful in helping them learn. However, if it’s not working, don’t pressure family members to join or lead the business, requiring a ‘plan B’ to be available – commercial takes priority over sentimentality.

Learn to lead: It takes time and hands-on experience for a family member to understand and position themselves in the family business. They will be under great pressure from within the family and the business to learn the higher management roles – prior to a parent’s retirement – requiring good training, support, mentoring and encouragement to develop the necessary skills and knowledge required.

Learn to let go: Meanwhile, the senior generation must be learning to let go of control – a real challenge for many entrepreneurs reluctant to acknowledge that anyone else is capable of running their business. However, you can’t retire until you let go and the succession plan is incomplete until you have learnt to let go.

Regrettably, this letting go phase is one which many businesses don’t survive. You must be prepared to give your successor a fair chance to prove him or herself. By progressively letting go you can demonstrate your confidence in them, they will learn and the businesses and everyone will prosper in the long term. Letting go does not mean leaving. There are always projects a founder can work on and guidance and experience that can be offered around the board table, in management meetings or in family meetings.

To retire from the business, you need something to retire to. Identify what this is early on so that letting go is a project that you are motivated to succeed in. Try, as far as you can, not to be dependent on the business for income post retirement. It’s a long journey and the sooner you start planning and implementing, the more successful the outcome for all involved.

And finally, go when you say you will.