Succession planning is something that all businesses should have in place. Whether you are a family business and need to plan for passing on to the next generation, or a business that needs to prepare a plan for a management buyout or trade sale, you need an effective plan that you have comfort and confidence in. It is also important for your staff to know and understand that there is a future plan in place for the business, and for them.
Succession planning is not just about who you can hand over the business to, it is about developing a plan that covers a number of key elements such as:
Business planning– where is your business now and where will it be in the future? Whatever your plans are you need to have them clearly defined so that any potential successor can follow in your footsteps.
Workforce planning– what skills do you have within your workforce, are there any gaps that could stop your future plans being realised? If you are planning to hand over your business to the next generation, you need to plan their development, consider their views for the future of the business and have a structure that meets the need of the business now and post succession.
Engage with your workforce – you need to communicate with your staff about your plans but do they need to know everything? You need to balance transparency with confidentiality. Does everyone need to know everything about your succession plan and if so, do they all need to know at the same time? Gossiping and rumours can spread quickly and may be damaging.
Decision making – if you are passing your business on to the next generation, it is vitally important that you include them in decision making processes now. Ultimately, you want to protect your business and your assets so make sure you have strong governance structures in place. This will ensure you are better placed to make important decisions on your family future wealth and put in place vehicles to manage and protect this.
In a family business, it can be very difficult as emotions can get involved. This is where it can help to have a professional involved to diffuse any potential emotional issues and keep your succession planning on track.
Start conversations early
Be open and honest
Understand the expertise you have in the business and harness it
Nurture and develop your future business leaders
Learn from each other both up and down the generations
Explore all the options available
Be prepared for the unexpected – what if your potential successor does not want to take over?
Learn to delegate and let go of responsibility
Be flexible – businesses need to be able to adapt so make sure your plan is flexible and review it regularly.
Sometimes, the hardest thing is to start the conversation. We can help and be the conduit you need to ensure the conversation about succession is structured and focussed on the objectives and outcomes that you want to achieve for both the business, the family and wealth preservation.
With accountancy and wealth management experts at hand we can assist with your tax and estate planning needs to ensure you maximise your returns, deal with any potential tax issues and use appropriate structures to help.
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.