If you own a construction, architectural, or engineering firm and are thinking about an ownership transition, you might be considering selling internally. While internal sales can work, you may find that your firm’s younger professionals are reluctant to buy a portion of your company or become a partner. As you consider an ownership transition, it’s critical you understand current transition trends and why the young professionals in your firm might have reservations about taking on a larger role.
By knowing the main reservations young professionals might have, you can better dispel their objections and help them make a more fully informed decision about taking part in an ownership transition or accepting a partnership role.
The Top 5 Reasons Young Professionals Are Resistant to Becoming Partners or Purchasing a Business
First, to be clear, an ownership or partnership role may not be right for everyone. While taking a larger role in a firm is often a great opportunity for many young professionals, some will be content fulfilling their life’s purpose and following their passion without being an owner or partner. As a result, you should expect some key staff members to not want to become partners or owners, which is okay.
That being said, you should make sure these young professionals are not cutting short their potential with career decisions based on misunderstandings or misconceptions about ownership. Before you offer an ownership or partnership role to a young professional, take a moment to review the primary objections they might have and learn how you can better explain the benefits of taking an ownership stake:
1. The Financial Cost Is Too Inhibiting
When you offer an ownership stake to a young professional, it can seem financially overwhelming to them. While taking an ownership role is a significant financial commitment, you can explain to them that it is typically done over an extended period with a developed plan to make it feasible. Since the financial commitment can be frightening, it’s important you also give them a finance plan that breaks down the transition and shows how it will actually be financially manageable over time.
Besides showcasing how much more manageable the financial aspect of an ownership transition can be, you can also highlight how taking an ownership role can give them greater autonomy in their career and financially reward them. As you explain the benefits, make sure your firm has a third-party consultant to guide them through the process and help them explore what an ownership role would look like financially.
2. The Reward Does Not Offset The Risk
Another common reservation young professionals have is that the rewards of a partnership or ownership role don’t outweigh the financial risk they’ll be taking. It’s important to acknowledge that this concern is valid but also reinforce the point that without any risk, they’ll likely not receive many rewards. If young professionals stay in their current roles, their level of reward will likely be limited.
Due to this limited prospect of a high reward, you’ll likely want to highlight that most professionals heighten and further monetize the level of their rewards with continued career development that includes ownership. While an ownership position will take more time and dedication, they’ll be setting themselves up for higher financial awards. Additionally, you might want to share how owning the company has given you a great sense of personal achievement, as the promise of this non-monetary reward can be incredibly attractive to some young professionals.
3. Ownership Will Interfere With My Work-Life Balance and Independence
Balancing life, family, and work is difficult in any profession, and young professionals will likely fear that an ownership role will make it even harder to handle. Though an ownership or partnership role can lead to work-life balance challenges, you’ll likely want to highlight that they’ll be positioned to better control this balance as a partner or owner. Since leadership roles often provide greater autonomy over one’s schedule, you can reassure them that advancement in their career will not interfere with their control over their life. Instead, it can facilitate more control and balance.
You can also highlight that leadership positions can enhance independence, as they’ll be in a position to make decisions that affect them, their colleagues, and their family. Alongside playing more of a role in decision-making, they’ll be able to delegate certain responsibilities. This ability to delegate often gives owners a greater sense of independence. Plus, they’ll likely receive more financial rewards in the long run, giving them more independence once they retire.
4. Partnership and Ownership Are Not Transparent
Some young professionals may be hesitant to become an owner if they don’t feel like ownership is being transparent about what’s required or involved to become a partner or owner. Within your practice, you may not have shared these details with members of your team due to expected confidentiality. You may have also avoided talking about ownership responsibilities to not bog them down with concerns about the firm’s operations and ownership when you needed them focused on more pressing responsibilities.
After all, younger professionals are often more focused on developing their design, engineering, or construction skills than on ownership concerns that don’t yet involve them. If an employee feels there’s not enough current transparency for them to make a decision, remind them that as they take on more leadership-centered roles, they’ll receive greater transparency. As they start training to become a partner or owner, many operational and financial aspects that do not seem so transparent will be more openly shared.
5. They’re Not Ready for Ownership-Level Responsibilities
Sometimes, young professionals worry that they’re not ready to become owners or partners in a business. If they don’t know the timeline of the transition, they may think that they’ll have to get ready in a short period and won’t have the time to fully prepare without losing all of their free hours.
One way to address this worry is to let them know that ownership transitions often take years, meaning that time is on their side. Instead of having to scramble to prepare, they’ll have the time they need to grow their leadership abilities during the planning and financial arrangement stages of the transition. With a well-thought-out ownership transition succession plan, you can also give them a defined training period, so they can feel fully confident they’ll be trained appropriately prior to taking over ownership of the business.
Choose Thinc Strategy for Ownership Transition Planning Services
At Thinc Strategy, we’re proud to provide business ownership transition services to a variety of construction, engineering, and architectural firms. When you turn to us for external or internal ownership transition succession planning, our certified merger and acquisition advisors can help. Alongside assisting with planning, we can also guide you through every step of the transition process. When you’re set on an internal transition, you might also be interested in our leadership coaching services to ensure your internal buyers are fully prepared to take charge.