Family business succession – pass it to your children, hire a manager, or sell?

For many Polish entrepreneurs, the question of succession is coming up for the first time. It is a natural consequence of the history of Polish business. A large share of privately held companies were built by the first generation of owners after the economic transformation. Their founders often still remain shareholders, CEOs, the main decision-makers, and the people who hold the most important client relationships, all at once.

Poland is therefore at a distinctive point. According to a PwC study, 53% of family businesses in Poland are still in the hands of the first generation, versus 32% globally. In Poland, 47% of family businesses have passed to a second or later generation, versus 68% worldwide.

Older PARP data illustrates the scale of the historical gap well: according to the agency, only about 5% of Polish family businesses were multi-generational companies that had already been through at least one succession.

Poland is only now entering, more broadly, a process that more mature economies have been going through for years.

Source: PwC, NextGen Survey 2024.

Succession is more than handing the company to your children

In everyday thinking, succession often looks very simple: the founder built the company, and their son or daughter should one day take it over.

In reality, succession involves at least three separate decisions: who should own the company, who should run it, and who should benefit from the wealth the family has built. There is no reason all three questions need the same answer.

• the owner’s children can remain economic beneficiaries of the family’s wealth without running the company,
• the family can keep ownership control while entrusting day-to-day management to a professional team,
• the family can bring in an investor, sell part of its stake, or opt for a full sale of the company.

That is why it pays to see succession more broadly – not as the technical handover of a business to the next generation, but as a decision about the future of the company, its ownership, and the family’s wealth.

What do more mature markets show?

Germany is a good example, with many family businesses already going through successive generational changes. That does not mean family succession happens automatically, though.

According to data from the ifo Institute and Stiftung Familienunternehmen, 42% of German family businesses surveyed have no designated family successor to run the company, and, per another study using the same base, only about 34% of firms recently managed to complete a succession within the family.

KfW shows a similar picture from the perspective of German SMEs. While 53% of owners prefer family succession, 45% are considering a sale to an external buyer, and 26% are weighing handing the company to employees. These categories are not mutually exclusive – owners could consider more than one option – so they should not be read as a simple breakdown of all successions.

Source: KfW-Nachfolge-Monitoring Mittelstand.

Earlier KfW research even showed a moment when the share of owners preferring family succession and the share preferring a sale to an external buyer were exactly equal – 45% each.

This is an important signal for Poland: not having a family successor is neither an exception nor a failure. It is a normal feature of a mature owner-led economy.

Five main succession scenarios

Rather than starting with “which child will take over the company?”, an owner should weigh several different options.

1. Passing on ownership and management to the next generation

This is the classic family succession model. It makes sense when the successor:

• genuinely wants to run the business,
• has, or can acquire, the right skills,
• accepts the responsibility that comes with running the company,
• is accepted by the rest of the family,
• can build authority among employees and business partners.

The problem arises when succession is planned mainly by the owner, not by the future successor. An owner’s child is not necessarily the best candidate for CEO simply because they will one day own the shares.

Deloitte’s latest global survey illustrates the scale of this problem well. 35% of respondents cited the next generation’s insufficient qualifications or experience as the biggest obstacle to succession, and 33% cited difficulty finding the right successor. Only 37% of respondents say they have high confidence in the next generation’s readiness for leadership.

Source: Deloitte, Family business succession planning and the next generation (2026).

2. Family retains ownership, professional management runs the company

Ownership succession and management succession do not have to happen at the same time. The family can still:

• own the business,
• set its strategic direction,
• exercise oversight,
• share economically in its growth,
• and hand day-to-day running of the business to a professional CEO.

In more mature markets, this model is gaining ground. Deloitte projects the share of family businesses planning a non-family CEO after succession could rise globally from 13% today to 26%.

This can be especially rational when the next generation wants to remain owners of the capital but does not want to tie their career to day-to-day running of that particular business.

3. A family foundation and professionalised management

Poland’s family foundation vehicle has created new ways to organise wealth succession. Its popularity shows that owners are genuinely looking for solutions that preserve the integrity of family wealth. According to the Ministry of Finance, close to 4,000 applications to register a family foundation had been filed by the end of April 2025, and over 2,500 foundations had been registered.

A foundation can help, among other things:

• keep ownership of the company within a single entity,
• reduce the risk of shares being fragmented among heirs,
• set the rules for how family wealth is used,
• separate individual family members’ day-to-day needs from ownership of the company.

But a family foundation mainly answers the question: who will own the wealth? It does not automatically answer: who should run the company?

That is why a foundation is best treated as a tool for implementing a succession strategy, not as the strategy itself.

4. An outside investor and partial realisation of value

Succession does not have to mean choosing between “the company stays in the family” and “we sell everything.” It is possible to bring in an investor while the family keeps part of its stake. Depending on the situation, this could mean:

• a minority investor,
• a growth-capital fund,
• a majority private equity investment,
• a partial sale of shares by the founder,
• keeping part of the stake for sale in a later transaction.

This option lets you simultaneously:

• realise part of the value the company has built,
• reduce the concentration of family wealth in a single business,
• bring in capital or expertise for further growth,
• keep a share in the business’s future growth in value.

For an owner who is not yet ready for a full exit, this can be a far more flexible solution than a classic 100% sale.

5. Selling 100% of the company

A full sale can also be a properly executed succession. This matters, because owners sometimes treat selling the company as a betrayal of the idea of succession, or as a failure of the family business. There is no economic basis for that view.

A sale can be a rational choice especially when:

• the next generation does not want to run the company,
• there is no natural successor,
• the business requires heavy capital investment,
• the sector is consolidating,
• a strategic investor appears with attractive terms,
• the family’s wealth is almost entirely concentrated in the business,
• further growth requires capabilities or scale the family does not want to build on its own.

In such a case, a sale does not have to mean losing the family’s life’s work. It can mean converting one concentrated, illiquid asset into wealth the family can manage in a more diversified way.

No successor does not mean a failed succession

A company can be the founder’s life’s work. That does not mean it should automatically become their children’s life project. You can be a good owner of a business without being a good CEO. You can also be a responsible beneficiary of family wealth without having any interest in the industry the company operates in.

From the company’s perspective, a forced family succession can be far riskier than hiring professional management or bringing in an investor. Succession is therefore a process that requires both sides to be prepared.

Selling the company doesn’t have to mean the end of the owner’s involvement

Just as common a simplification is treating a sale as an all-or-nothing decision: sell everything and, from the next day, have nothing more to do with the company. In practice, deal structures can be far more flexible. It is possible to have:

• a full sale,
• a sale of a majority stake,
• a sale of a minority stake,
• a capital injection without a full owner exit,
• a partial realisation of value,
• keeping part of the stake for a later transaction,
• the founder staying on for a time on the board or supervisory board.

This lets an owner answer three questions separately: how much capital do I want to realise today, how much ownership do I want to keep, and how long do I still want to be involved in running the company.

The answers don’t have to match.

A well-prepared succession increases the company’s value and optionality

Succession has another important dimension. A well-prepared company should be able to function independently of the founder. If the owner:

• personally makes every important decision,
• holds the relationships with key clients,
• holds unique knowledge of processes,
• signs off on every major investment,
• is the only person who knows about the company’s strategic relationships,

then any exit by the owner – whether to a child, a manager, or an investor – becomes harder. That is why preparing for succession should include, among other things:

• building a second layer of management,
• formalising processes,
• tidying up reporting,
• documenting know-how,
• shifting client relationships from the owner to the organisation,
• tidying up the ownership structure,
• separating private assets from the operating business.

For a potential investor, this means lower risk of dependence on the founder. For the family, it means greater freedom of choice.

The most valuable result of a well-prepared succession may therefore be optionality. An owner can hand the company to their children. They can hire a CEO. They can bring in an investor. They can sell the company.

And they can make that decision when it suits them, rather than only when age, health or a family conflict forces it.

Succession is not the place to start with tax

Legal and tax considerations are an important part of succession. They should not, however, be the starting point. The first question should not be: should we set up a family foundation? It is better to start with:

• does the family genuinely want to remain the owner of the company?
• does anyone in the next generation want to, and know how to, run it?
• does the owner want to stay involved in the business?
• does the family need some liquidity?
• does the company need fresh capital or a partner?
• would selling the company genuinely be an unwanted outcome?

Only afterwards is it time to choose the right legal, tax and organisational tools.

Succession is first and foremost a strategic, ownership-level decision. Only later does it become a tax and legal matter.

Seven questions every owner should ask

Before starting succession, it’s worth answering a few simple but often difficult questions:

That last question is especially important. An owner can spend years assuming the company will be passed to the next generation, without ever having compared that scenario to the alternatives.

That is exactly what succession planning should be for: not executing a predetermined model, but consciously choosing the best option for the company, the owner and their family.

Succession as a decision about the future of capital

Succession is one of the most important moments in a family business’s history. It is not, however, reducible to choosing the next CEO. It is a decision about the future of the company, control over it, and wealth the family has built over many years.

For one owner, the best solution will be handing the company to their children. For another – keeping ownership in the family and hiring a professional management team. For another – a family foundation. For yet another – an investor, a partial realisation of value, or selling the whole company.

Succession is not about keeping the company in the family at all costs. It is about arranging ownership, management and wealth in a way that secures the future of both the company and the family.

How can PROMETEIA help with succession?

Succession does not always require selling the company, but it very often requires comparing several possible ownership and capital scenarios. At PROMETEIA, we help owners assess whether, in their situation, it is more rational to keep the company in the family, professionalise management, bring in an investor, partially realise value, or fully sell the business.

We can support an owner with, among other things:

• assessing possible succession scenarios from the perspective of company value and owner wealth,
• valuing the company and gauging its appeal to potential investors,
• preparing the company for an investment or sale process,
• securing a minority investor, a private equity fund, or a strategic investor,
• running a partial or full company sale process,
• negotiating the economic terms of the deal and coordinating the process alongside legal and tax advisors.

Above all, though, the decision about succession should not be made under time pressure. The sooner an owner compares the available options, the more freedom of choice they retain, and the more time to prepare the company for whichever scenario turns out to be the best fit.