Succession Planning Strategies for Small Family-Owned Businesses

Abstract

Some business owners lose young, skillful midlevel leaders to competitors because of limited training to prepare a potential successor for senior leadership roles. Family business owners lack succession strategies to transfer business operations to a junior leader that can lead to business closure and increased community unemployment. Using the transformational leadership framework, the purpose of this multiple case study was to explore the succession planning strategies that small family-owned business owners use to train the next generation of leaders in the southeastern region of the United States. The data sources included a semistructured interview with two business owners and leadership training manuals for planned succession. The three themes that emerged using thematic analysis are acknowledging the challenges of the generational gap, coaching the potential successor to run the business, and planning for business sustainability. The overriding recommendation is that successful next-generation transitions require strategic planning by the business owner and the successor as soon as possible. Entrepreneurs of small businesses may use the findings to develop a strategic plan to train and transition middle managers to senior leader roles. The implications for social change include enhancing business sustainability, leading to continued employment and local products for members of the community.