Raising a successor

My professional insights · Lyudmil Karaulanov · 8 min read

Published: 1 August 2026 · Version 1.0

Handing the business to another person means entrusting them with something of your own life. Your decisions, relationships and efforts remain within the company. It is natural to want the next person to appreciate them and carefully continue what you began.

But that person also brings a life of their own. They may have different abilities, a different way of working or doubts about whether they want this role at all. For me, preparing a successor begins with an honest conversation about this before moving on to positions, shares and documents.

The business successor is not necessarily your child

Within the family, we naturally look first to the children. The question is whether any of them wants and is able to take over management, without the expectation becoming an obligation of birth. The successor in management can also be a professional while ownership remains with the family.

The heir to ownership and the successor in management therefore need not always be the same person. A business can remain family-owned but be run by a professional team. A key employee can gradually take over operational leadership. The next generation can participate in strategic decisions without managing day-to-day work.

The right to decline matters too. Succession built on family expectations, a sense of duty or fear of disappointing a parent rarely produces a resilient leader.

The first question is not “Who is the closest heir?”, but “Who has the willingness and ability to take on this particular role?”

Mentoring is not the handover of ready-made answers

Owners know their businesses almost instinctively: they understand customers, sense risk and decide from experience accumulated over years. This knowledge is difficult to pass on through explanations alone.

Mentoring requires the next person to be involved in real situations: negotiations, difficult conversations, investment decisions, conflicts and mistakes. Watching from the sidelines is not enough. Gradually, they begin forming their own position and bearing its consequences.

The goal is not to create a copy of the founder. It is for the next person to understand the business's logic well enough to make independent decisions in an environment the founder may not know.

Delegation begins with real responsibility

Assigning a task while retaining every important decision is an understandable way to protect yourself. But the person is then practising execution, not management. Management is learnt only when they gradually receive real authority, resources and an opportunity to see the consequences of their own judgement.

Genuine delegation means clearly defining:

• the area for which the person is responsible;
• the decisions they can make independently;
• the resources available and the limits beyond which approval is required;
• the results against which they will be assessed and the consequences of a mistake.

Responsibility is real, but grows gradually. Someone who has never had the right to decide anything independently cannot suddenly be entrusted with the entire business. A period of working together is also useful, in which roles slowly reverse: the founder moves from decision-maker to mentor, and the successor from observer to someone who bears responsibility personally.

When the founder allows a different approach

The most uncomfortable moment may be the first reasonable decision you would not have made in the same way. This reveals whether we are handing over responsibility or expecting a repetition of our own approach. It helps if the risk limits within which a different approach can be tried have been agreed beforehand.

If every different idea is corrected in advance, the successor will not build authority of their own. Employees and partners will continue seeking the “real decision” from the previous owner. If the founder continues to overturn decisions, issue parallel instructions or quietly manage behind the new leader's back, succession will remain on paper only.

Authority cannot be transferred by contract

Shares can be transferred, a managing director registered and powers recorded. But the trust of employees, customers, banks and partners must be earned. The successor therefore needs gradual introduction to key relationships, not as a companion but as someone who already carries specific responsibility. Without such a transition, formal power remains disconnected from real authority.

Ownership can follow management

Management and ownership do not have to be transferred simultaneously. Sometimes it is sensible to entrust an operational role first, then provide participation in the results, and only later ownership of part of the business. This allows management ability, attitude to risk and readiness for long-term responsibility to be tested.

Good conditions measure genuine contribution rather than obedience to the founder. Otherwise, the promise of ownership becomes a perpetually postponed instrument of control, and sooner or later that destroys motivation.

What if there is no suitable successor?

This answer can be painful, but does not invalidate what has been built. Professional management, a change of ownership or a sale can also preserve value and give the family a good next chapter. These options are much harder to prepare if the impression that a willing and ready successor exists is maintained for years.

The options vary:

• a professional management team or an external chief executive;
• heirs participating only as owners, with oversight but without day-to-day management;
• a sale to an investor or a management buyout;
• the gradual closure or separation of individual activities.

The absence of a natural successor is not a failure. Failure is leaving the question unanswered until the choice is no longer free.

Where is the point of instability?

What this concept means →

It arises when readiness is expected without the conditions for it having been created. A position can be conferred in a day. The team's trust, knowledge of the business and confidence in making decisions develop more slowly.

For me, successful preparation allows the founder to step back gradually and the successor to occupy the role with judgement of their own. The handover can then be experienced as a continuation with room for both, rather than a final examination for which no one had the opportunity to practise.

This material is of a general analytical nature and does not constitute individual legal, tax, financial or investment advice.