When it comes to leaving a legacy, what most often comes to mind is, “How will I be remembered?” But legally, legacy is about the distribution of a person’s property, money and even business to family and loved ones. I’ve spent the last 25 years running businesses to support my family financially, but as my kids have grown up and transitioned into adulthood, my business purpose has shifted.
As a multi-unit franchisee with Celebree School, I’ve built a sustainable network of small businesses. When I first began with Celebree School, the early childhood education industry was entirely new to me. But over the past few years, growing the business and opening new locations has strengthened my passion for working in an incredibly meaningful space. Since finding a scalable business model that met my key criteria for a legacy business, I find joy in realizing what I build today is far more than a stream of revenue—it’s a huge part of how I will be remembered.
Recognizing you want to leave a business as a legacy for your children is just the first step. Setting up your organization for a familial succession is no easy task. From first-hand experience running several different businesses, I’ve learned that setting up a business to be passed down requires different considerations than setting up a business you plan to sell one day.
Below are a few tips for business owners looking to start building a family legacy business:
Vet Every Opportunity
When deciding what kind of business you want to create or invest in, make sure you carefully research and vet every opportunity. Consider how a business would fare during hard times and whether the business model allows for expansion and growth in the long term. It is important to ask yourself whether your children could learn the business.
Alongside longevity and growth potential, be sure to choose a business that aligns with your family’s core values, professionally and personally. It is important to invest in an industry that gets you excited about the work you are doing, and choosing a business that you believe in is the best way to do that. It might feel daunting to make choices that affect multiple generations decades from now, but you need to be highly intentional in the decisions you make early on so your business will stand the test of time.
Set a Monetary Goal
Once you settle on a specific industry, product or service, and operational model, you need to map out a few goals you’d like the business to reach. Alongside this, lay out any personal milestones you see for yourself and your family. Get specific with this goal-setting phase. Touch on financial goals and estimate the point in time when you want to achieve certain things. A good goal to have in mind is how much money you’d like to make in order to set yourself, your family, and your business up for success.
In order for your business to be passed down as a legacy, it will have to reach a certain monetary milestone. You need to keep this number in mind when creating goals for your business so you can be realistic about your expectations. For me, owning and operating 10 schools would keep my family on track to remain successful in the future. So, my goal to reach this number was to open two schools a year – since my start in 2020, I officially have five up and running successfully, providing momentum for the future.
Create an Effective Succession Plan
Once you have a business plan in place and are on a trajectory to meet the goals you’ve set, it’s time to create a succession plan. Successful generational transitions are critical for preserving a family business legacy. A well-thought-out succession plan can mitigate concerns about finances and responsibility when ownership passes on to the next generation. Legacy businesses have the potential to stir emotions and cause rifts, so be transparent when discussing your plans so when the time comes, a seamless transfer of leadership, knowledge, and expertise occurs.
When creating your succession plan, you need to be realistic about how individual family members could be a part of your business’ future. You need to keep their skills, priorities, and lifestyles in mind when dividing and assigning roles. This will help you identify potential successors and give everyone enough time to invest in the necessary training for a transition of ownership.
Have an Open Dialogue
When you begin integrating your family into the business, be sure to overcommunicate the details. It’s important to recognize that just because you think one of your family members should take over your business, they might not be interested in doing so. Keep an open dialogue with your family members to understand why they might not be interested, and what you might need to change within the business. When each family member has an understanding of how the business is doing and growing, it helps make passing the legacy down less stressful.
Setting guidelines and protocols for conflict resolution, wealth management, and family involvement in the business ensures harmony, transparency, and the long-term sustainability of the legacy. By fostering strong family governance, family businesses can navigate challenges and protect the interests of both the business and the family.
Jason Skidmore (pictured right), owner of JMS Management Group (Celebree School). Skidmore began his entrepreneurial career as the co-founder of a healthcare transportation company before launching a management company and then a full-service automotive repair and inspection company. Now, he is a multi-unit owner within Celebree School, a leader in early childhood education that provides infant and toddler care, preschool, before and aftercare, and summer camp programs. Skidmore is creating a legacy business that will continue for generations to come, serving the community in an impactful way.
