BEING given an established business by your parents when they retire may sound like the ultimate dream to a budding entrepreneur. But taking over a firm that has been built up by your mother or father over many years can also be a minefield.

On the one hand you are itching to do things differently now that you are in control. On the other, you need to be sensitive to the fact that any bold changes could upset your parents and lead to a bitter falling out.

Penny Heath, an adviser with Business Link, said the biggest problem with handing a business from parent to child is that the parent can find it difficult to let go after so long.

“It’s like a child to them,” she said. “They’ve nurtured and created it and they don’t really want another pair of hands taking care of it for them. Of course, there will be those who gallop towards retirement quite happily and look forward to the idea of taking time off. But for the majority the biggest hurdle is letting go.”

Peter Leach, chairman of the BDO Centre for Family Businesses, said that it is vital that they take a step back from the day-to-day running to allow the younger generation the freedom to get on with the job.

“Make sure that the outgoing generation doesn’t continue on the board,” said Leach. “You must have a clean break in the boardroom. If you have a situation where people still go and find the old chairman and ask for his views, you will get complete mayhem.”

A key element of ensuring this, he said, is to make sure that the person passing on the business does not remain financially linked to it.

“One issue that is fundamental to a successful succession is that the leaving generation is ring-fenced financially so that they are not dependent on the younger generation. If they are dependent, they tend to interfere more, and the interference is loaded because they have an agenda. If, on the other hand, the older generation have sorted out their money, then if they do give advice it is of much better quality because they don’t have an axe to grind.”

One family business that has managed the succession issue with relative ease is Sportsshoes. com. The company was started in 1982 by Bruce Bannister after he finished his career as a professional footballer, in which he played for Bradford City and Bristol Rovers.

At the time, his daughter Victoria was 10, and she remembers the big impact the business had on family life.

“Even as a child I would always work in the shop, either after school or at weekends,” she said. “It was a family business so we had to be there. It was in my blood from the beginning.”

After leaving school she went to study at the European Business School in London and then worked for top sports brands such as Speedo and Lacoste.

But in 1997 she joined her father’s business and spent the next three years shadowing him by taking part in meetings and watching how he ran the company, until gradually her father started to take a step back.

In 2002, she became managing director and has since brought in another family member, her brother Brett, to help her take the business forward.

She said that her father started the business so he could provide for his family, but there was never any pressure for her to take over its running when she grew up.

“He wanted to set up something that would provide for the family and give his children the opportunity to get involved if we wanted to, but by no means having it forced on us,” she said. “You couldn’t be a success if you didn’t want to be there.”

For her, taking time to establish herself elsewhere first before joining the family business was important. “It was good to get a different perspective on life and establishing a name for yourself – and become an independent person rather than just being someone’s daughter.

“I had been involved with international PR and marketing so I was grounded on those sides of business, and that initially was what I looked at.”

Victoria acknowledged that there have been disagreements between herself and her father over the years, but she said that, overall, the transition has worked well.

She now makes most of the business decisions, with her father spending more time away from the business, enjoying his hobbies.

Leach said that while the younger generation should be allowed to get on with running the business without interference, they should also create a way of tapping into the expertise of the older generation.

“When people pass the business over and then disappear, you run the risk of losing a lot of knowledge. So one best practice in succession planning is to create an environment in which knowledge and experience are shared by the outgoing people to the new people. Not in a boardroom setting, but in a family council or forum where the younger generation and the elders can work as an inter-generational team to pass on knowledge.”

One company that has a great deal of experience with family succession planning is the wholesale steel business FH Brundle. The company was started in 1889, and is now moving towards the fifth generation of ownership, with Michael Brundle taking over from his father Richard.

Although the company has a long history, it has grown strongly only in the past 20 years, and there are now six offices across the country with more than 100 staff.

When Richard was growing up, he always knew that he was destined to join the family business.

He said: “I grew up with the business round me. It becomes second nature and I never thought of doing much else. As soon as I left school I knew I would go into the family business.”

But the handover from Richard’s father was not worked out in advance and meant that Richard had to take responsibility with little notice.

“My father couldn’t make up his mind when he wanted to retire,” said Richard. “He came up to me one day when he was 68 and said he had just decided to retire in September.”

Luckily, now that the time has come for Richard to hand over the business to his son Michael, the management structure has become more organised as the company has grown and the handover process is more clear cut.

Richard said: “I am working much more closely with Michael, and he is doing a lot of the work that a proprietor would do. And although we have never sat down and said let’s phase it this way, that is the course it is taking.”

Michael came into the family business after graduating from university and taking a year out, and has been gradually taking on more and more tasks.

“As we have gone through the years I have taken things away from my father – things like health and safety. You slowly take things on,” said Michael. “And, although I don’t want my father to retire, if he was to, I am fairly confident that I could make the right decisions to keep the business moving forward.”

FIVE STEPS TO TAKING OVER

Make sure you actually want to take over the business.

Get your parent to set a timetable for his or her withdrawal from the company.

Get as much experience as you can outside the business before you take over the reins.

Draw up a training plan so you have a solid grounding in each area of the business.

Conduct open discussions on the future of the business with your parents. Talk about what their expectations are and what yours are.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts