Why Family Succession Is a Different Animal

By Neil Swindale — Episode 7 of the Mergers & Acquisitions Show

Selling a business to an outside buyer follows a fairly predictable path: prepare the company, bring in advisors, negotiate terms, and close. Family succession is different. It introduces emotions, expectations, family dynamics, and legacy into the equation.

Key questions quickly arise:

• Do the children actually want the business?
• Are they capable—and ready—to run it?
• How do you divide roles and authority fairly?
• How do parents step back without undermining decisions?
• And how does everyone get paid without breaking the business?

These are not one-time conversations. They’re ongoing discussions that require honesty, planning, and patience.

One of the Best Moves: Leave the Family Business First

One theme Orrin emphasized strongly is that some of the most successful second-generation leaders did not start their careers in the family business.

Here’s what they did instead:

• Went to school
• Worked for other companies
• Learned different cultures, systems, and technologies
• Developed credibility and work ethic outside the family name

When they returned years later, they brought fresh perspectives—and earned respect more easily from employees.

Coming back with real-world experience is very different from stepping into a leadership title straight out of college. Respect is not inherited. It’s earned.

Titles, Trust, and Doing Every Job

Many first-generation owners built their businesses by doing everything—filling machines, stocking warehouses, servicing accounts, talking to customers, and managing finances. That experience matters.

If the next generation skips those steps, problems emerge quickly.

Giving a child a VP or President title without experience often backfires. Employees notice. Trust erodes. Culture suffers.

The strongest transitions happen when the next generation:

• Starts in the trenches
• Learns each department
• Understands the numbers
• Builds internal relationships
• Gradually earns responsibility

The goal isn’t just continuity—it’s credibility.

Sometimes Letting Go Is Hard, But Necessary

One of the toughest parts of succession is for parents to step back. Many owners continue coming into the building every day, even if they’re not needed operationally, because the business is part of their identity. That presence can be a comfort, but it can also be stifling.

If the next generation is going to grow the business, they must be allowed to:

• Make decisions
• Make mistakes
• Learn from those mistakes

Parents should shift from decision-makers to advisors. That transition is hard after 30 or 40 years of control, but it is essential for the future generation’s success.

Planning Early Makes Everything Easier

Succession planning should never be rushed. Ideally, it starts years in advance.

That planning includes:

• Documented processes
• Clear financial reporting
• Defined roles and responsibilities
• Relationship transfer with key accounts
• Gradual authority handoff
• Open conversations about compensation and ownership

Running the business with an “exit mindset” from day one. This is something Orrin and I often discuss, and it applies just as much to family succession as it does to selling.

The Financial Reality: Can the Kids Afford It?

In some cases, children want the business—but can’t afford a traditional buyout. That doesn’t mean succession is impossible.

Options include:

• Seller financing (parents carrying the note)
• Gradual ownership transfers
• Consulting fees paid to parents
• Trust structures
• Gifting equity within current tax exemptions
• Adjusting lifestyles to support cash flow

Each situation is unique, and professional tax and legal advice is critical. But flexibility and creativity often make family transitions possible when rigid thinking would fail.

Not Every Story Goes as Planned (and That’s Okay)

Not every family succession works. Life happens. Health issues arise. Marriages end. Children discover different passions.

Sometimes, the best outcome is selling the business—and positioning the next generation as valuable assets to the buyer.

Success isn’t defined by keeping the business in the family at all costs. It’s defined by making thoughtful decisions that protect both the business and the relationships behind it.

Final Thought: Talk Early. Talk Often.

If there’s one takeaway from this conversation, it’s this: communication matters more than structure.

Talk to your kids early. Be honest about expectations. Ask what they want. Share what it takes. Build a roadmap together.

When family succession works, it’s one of the most rewarding outcomes in this industry—watching something you built not only survive, but thrive in the hands of the next generation.

And that’s a legacy worth planning for.

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Orrin Huebner is the CEO of Orrin Huebner LLC. After many years of being an owner/operator, he now consults and is an intermediary to the industry. His experience as a very successful operator and then leading OCS for a Canteen provides great value.