A Successful Family Business Ownership Transition

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Every small family business faces unique and unusual choices unlike other small businesses. This is true when the founder(s) or family business owner(s) decides to explore transitioning from management, reduce their ownership share, leave the business (and/or perhaps even consider selling it to a non-family member).



However, in order for a smooth transition of management oversight and/or business ownership from one family member to another, there are some important considerations that everyone needs to face.

  • Is the current owner willing to give up “control” of the business and perhaps new management?
  • Is the potential new business owner(s) sensitive to the founder’s needs related to control and change?
  • Will the new owners have a passionate commitment and be competent to manage this type of business?
  • Can the business “pay” any price/value of the business requested by the departing founding owner?
  • Is there a transition plan that both the out-going and in-coming owners can create together?


These are several considerations that all need to be addressed and solved. No small feat!!

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Transition is a process

First, effective ownership succession is a process with time to gather all the critical metrics and develop a plan – and for everyone to feel comfortable phasing in or out of the business. Unless there is a reason to hurry, it is preferable that the current owner take some time to phase out of their role, and the new owner(s) slowly phase in. 


Communicating about the business to all generations

If you plan to pass your business on to the next generation, engage them in positive ways – from an early age. Talk about the business to give an appreciation for the work and the impact that it has in the community. There may your business struggle so be sure they also see what you love about this business and why they might, too. 

When they are able to work in the business, can you frame it as an opportunity instead of a burden? (Just because someone is your close relative, does not mean they want the business as much as you do.) Ideally this starts with a relationship built on trust. You can both be honest about what you want for yourself and for the business.


Setting up the next generation for success

How do you reach a point where the next generation is passionate about the family business and you feel ready to put them in charge? Each family business is unique and there are many paths to answering this question. 


Here are some ways to get there:


  • Give the next generation important opportunities to work in the business. Ideally years before an actual succession takes place, the next generation should be getting experience in the business, perhaps even working different jobs and in different departments. You want your family members to develop their skills. You want them to get hands-on experience as well as learn about the culture of the business and start understanding the business inside and out.
  • Encourage the next generation to follow their outside interests. You want the next generation to want to be a part of the family business. Though it might seem counterintuitive, there is value to the family business if the next generation get work experience elsewhere. They will gain skills, build confidence, and create their own identity working in another business environment. If and when they decide to return to the family business, they will bring those skills and that confidence with them, and the family business will be all the better for it.
  • Key tasks and delegation. Each family member wants to find their own place in the business. This will help everyone understand how they fit into the business and to each other. This is especially important in a family business with both family and non-family employees. Existing employees also want to understand how the incoming family member fits into a particular role in the business. Will a new family member have goals; will they too have to listen to and take directions and also need to create metrics to measure progress. 
  • Key roles and responsibilities. Your roles are important for you as the current/departing owner. The exercise of defining your responsibilities can make take stock of all the things you do. What are the responsibilities and critical skills necessary to run the business? What parts of your job play to your strengths? What is most challenging? Writing out this “job description” can help clarify the job/roles for the family member joining the business, including what aspects of your current role you want to pass on first.


Give the next generation specific areas of responsibility. Are there specific aspects of the business where the eventual new owner of the business can sink their teeth into and make their own? By taking responsibility for one aspect of the business, they will develop their skills and implement their ideas within certain parameters, and you get to practice giving up control. New members can take on new areas of growth; can become the head of technology or could apply their skills in financials analysis and/or making meetings work.


Share the challenges. It is important that you don’t shield the next generation from discussions about the challenging aspects of the business – when there is a loss of client; a production error or employees who must be re-trained. This will give a more complete understanding of the business. You would hope that they may bring some fresh ideas or new perspectives. Invite them to share their ideas on ways to help the business in the short-term and over the long-term. Apply their solutions and see if they can be implemented and measured.


A changing business – timing is everything

The next generation may want to make changes that will affect the way business is done or how technology is used. They may want to add new services or products to match a changing target market. You as the departing owner may see the value in certain changes. It can be difficult to watch the business going in a different direction. This is a common tension for family businesses. The timing of how to “control” different aspects of the business get shifted, needs to feel comfortable for both the outgoing and incoming owner. If changes feel too fast, you, as the departing owner, may resist implementation and/or sabotage the change. If change feels too slow, the incoming owner may decide that this is not the right fit for them as nothing will ever change!


Letting go – moving on

This may be the hardest step you as an existing owner will ever have to take. It is understandable that after pouring your time, energy, sweat and heart into your business for years it can be very difficult to let go and let others take charge. The business has most likely been central to your identity for decades. The owner of this business is who you are in the business, within the community and within the industry in which you travel. This “letting go” will be a very, difficult process. It will require honest discussion with you and all others. Then, there may need to be a written agreement on the stages of a transition and a timeline for getting there. Yet, once these decisions have been made, you will be able to create a framework for a successful transition.


Creating a succession plan – a peaceful transition

You and your family don’t have to stumble through succession planning alone. It should be a team effort with support from an accountant, an attorney, and a business advisor and/or mentors. They can help you set a reasonable timeline, guide you through the process, help you create a framework for the transition and understand how this leadership change will impact your business. 


Learning about other family business’ experiences with succession planning can be invaluable as well. The changing of the guard can be peaceful and very empowering for all concerned. This is always an essential step for the long-term success of any business. Drop the reins and let other family members take up the slack. With a careful and in-depth plan, you will all be ready. You will have people who are qualified to take over; they will bring energy, passion, and new, exciting ideas; the business will continue and grow. 


In the end, you will not regret it. You not only started and have grown a successful business but determined how it will continue well into the future.


Good work, boss!


By Paul Terry July 8, 2026
Kibo Farm’s Vince and Jenny Trotter. Here is the background of business experience, philosophy, and passion that Jenny and her husband Vince have used to start and develop a successful small business. (This interview written in part by Lauren Papalia a Sonoma County writer and part-time farmer and edited in length with some added details by Paul Terry) LP (Lauren Papalia) : Kibo Farm’s crops are nestled in a bowl, surrounded on three sides by Belden Barns grapevines. What are the nuances of your topography and the challenges and advantages that come with it? KF (Kibo Farm) : The property itself sits nearly 1,000 feet up the Northwestern flank of Sonoma Mountain, looking out over Rohnert Park and Bennett Valley. The beauty of this spot is that we rarely, if ever, get frost because cold air slides down the mountain, settling in the lower elevations. Our lemon, mandarin, lime, and yuzu trees love it! With that topographical feature working in our favor, we’ve got more citrus trees planned, which will help with wintertime cashflow. LP: Kibo Farm was an inaugural cohort of co-op members at FEED. Jenny, you were formerly the Board's president. Philosophically speaking, what are some of the challenges and benefits of structuring an organization in this way? KF: There are many benefits to the co-op model for the key stakeholders – in our case, the farms and FEED employees – are able to have a voice in how the business operates. The work that FEED does – marketing, selling, and moving local products from farms to customers – is such an essential part of the food chain. We can grow delicious produce, but we need to get it to eaters. With a cooperative structure, we are creating a robust, collaborative, and sustainable organization that we know we can count on. Additionally, we can reach buyers of scale that we might not have been able to serve well individually. LP: What do you find most rewarding about farming? KF: Hands down – the pleasure of feeding people. That may sound corny, but we get such a high watching friends or family enjoy a delicious meal that you prepared, multiply that by 10 and you will understand. We may not be in the restaurants and homes where our produce is served, but we know many of the chefs who buy from us, and our neighbors and friends. This is proof that our labors nourish and even delight our community. That brings us deep satisfaction. LP: You told us that “farming is the life to which you’ve been called, and if one word captures the feeling of that calling, it’s stewardship.” What does "stewardship" means to you? KF: Stewardship for us is bringing our whole selves to farming and making choices that result in long-term benefits to the land and to the living beings reliant on that land. It is about caring for this place for the time we are here and for the benefit of future generations. We don’t own this land but feel so grateful to be able to farm it and for the relationship we have with the landowners. Nate and Lauren Belden, who own the property recognize that, in this region, there is an imbalance by which land usage for wine grapes often outcompetes other forms of agriculture. They felt that sharing land can actually create some interesting opportunities that benefit the different crops as well as the people who farm them. The Beldens are conscious of the constraints placed on producers like us and work hard to make sure that our relationship works for everyone involved. LP: What’s something you wish more people knew about farming? KF: Over the last 20 years, farming has been glamorized where some farmers enjoy a near-celebrity status. This elevated profile of agriculture has helped all of us to find new markets and new customers. But farming sometimes gets labeled a "lifestyle" rather than a "living". Every farm is a small business struggling to stay alive. If many of us work second jobs that doesn't diminish the farm as an important enterprise, it simply underscores the difficult economics of producing food in this day and age. Across the US, the average farm makes less than 25% of the income they need to support their families from revenue generated on the farm. The bulk of what they need comes from other jobs. At Kibo Farm, land and housing is subsidized, but we still rely on off-farm work to cover over full cost of healthcare, childcare, etc., and so do our employees. LP. The USDA cites small holdings like Kibo account for over 90% of all US farms but only 15% of overall market value of agricultural production. How do we make this better? Do co-ops help ameliorate some of these issues? KF: We have to work together to solve problems like the high cost of land and disparate degrees of access. We have to raise the expectations for how much food should (because it actually *does*) cost. With time, we need to find ways to compensate farmers and ranchers not just for their products but also for the ecosystem services they provide to the community as a whole: sequestering carbon in the ground, converting food waste into soil-enriching compost, maintaining open landscapes, reducing wildfire fuels, and staving off invasive plants and insects. In terms of solutions, cooperative ownership models certainly play a significant part. By coming together with other farms who are technically our competitors, we can work together to supply food to communities on a much larger scale, creating economic security for the farms and a more stable supply chain for the communities. Cooperative ownership of land where farms pool capital and spread the risk of expensive acreage could be an interesting solution in competitive regions like ours. LP: What is your vision for the farm's future? What are you most excited or hopeful about? KF: One unique aspect of our farm business is the interdependent relationships we’ve built with certain chefs in the Bay Area. For several restaurants, we sit down each winter, pour over seed catalogs, talk about what we’re dreaming of and all the new things we’d like to try. From those conversations spring crop plans and lay out lists of different produce along with quantity and frequency of delivery. This kind of close-knit relationship brings security, because 70% of what we grow is virtually pre-sold. This allows us to take risks and deliver items to these chefs that they might not find anywhere else. Having partners who value what we do and entrust us with something so core to their own business inspires us deeply and injects every Spring with a spirit of excitement and even mystery that keeps us going.
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By Paul Terry June 13, 2026
As the coordinator of Renaissance Entrepreneurship Center‘s Business Planning Class, I helped small business entrepreneurs prepare for their emerging small businesses. Melissa was a very active student and role model for others – both with her classmates and her referrals to others to become future business owner. Melissa is an amazing jewelry designer and very smart and generous businesswomen. Melissa Joy Manning has created a socially responsible fine jewelry brand featuring unique, modern designs influenced by her passion for travel, art, and culture. The line encompasses multiple collections including one-of-a-kind pieces, signature designs, and custom, non-traditional wedding jewelry. Here are some thoughts that Melissa shared on goals, planning and having a vision. Melissa suggests that it was with our combined help (and from mother at Renaissance) that she learned about the importance of setting well-defined goals: “I was lucky enough to have had an amazing teacher, Paul Terry, at the Renaissance Center in San Francisco, who taught me the importance of vision. He taught me to envision my success and what it would encompass. I used these goals as benchmarks when building my brand. Every time I reached one, I would sit down and create another. As the ‘visions’ kept coming true, they emboldened me to think bigger and more creatively each time.” Here is some of Melissa’s great advice for others considering or running a small business of their own: Make sure it’s what you want to do. If you really love doing something consider how it will change when it becomes a business. I meet a lot of people who loved a hobby but when they had to economize it on a daily basis, found that they lost all joy in it. This must be something that you really want to do and will commit to do it for the longer term. Know that your life will change Your friendships, relationships, how you view the world…everything will change.. When you take charge of your life by forging your own path, a lot of lessons will come forward that you didn’t consider. In some ways, it’s like a veil lifts in how you see the world. Remaining true to yourself and your passion will carry you through any unexpected reaction or loss that success may bring to you. Always, always, always listen to your heart. If you are true to yourself you will always succeed.
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By Paul Terry May 28, 2026
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