Succession planning is one of our key areas of expertise at Paish Tooth, and we have extensive experience of working with family-run and owner-managed businesses. For some, succession planning may just mean finding a buyer for their business, but for others it may signify a need to marry business and family goals in order to ensure a smooth transition to the next generation. We can offer you professional advice and support throughout this potentially sensitive process, and provide an independent and professional perspective to help you in any decision making.
The key to any business succession is having a good plan in place. These are the factors to consider:
When you’re busy in your business, and working hard to make it as successful as possible, there often isn’t the time to think about making hand-over plans.
However, leaving it to the last minute could mean that you’re missing out on positive opportunities that could arise along the way, or equally making assumptions about outcomes which will never happen.
Putting a succession plan in place shouldn’t be an age-related decision. It should form part of your on-going business strategy and should influence your workforce plan for the future. Remember that a succession plan can come into play not just when you retire, but could also be required should you become long-term sick or otherwise unable to continue working.
If you create a succession plan now you can build in flexibility, should circumstances change in the future.
Selection and training of the right management team is crucial for successful succession planning. Don’t assume that family members will want to inherit the business. It’s important to recognise that your relations may feel awkward about filling your shoes, particularly if it means managing staff who could have known them since they were a child! Your family’s familiarity with the business shouldn’t take precedence over employing someone with the right skills set.
Once you have selected the appropriate people to help support you with the management issues, make sure you provide them with enough opportunity to gain experience and demonstrate responsibility. Delegate to them, and learn to let go! If the next generation are given the authority to make decisions it makes the transition easier – you will gradually gain more confidence in them, and so therefore will the rest of your workforce.
Don’t feel that you can nominate only one successor – if there are several people suitable for development to take over the business then this can increase your options and offer more flexibility.
Another key to your success is ensuring that the stakeholders involved in your succession plan understand exactly what role they will be expected to play. They need to buy in to your intentions and feel comfortable with your strategy. Share with them your proposed timescales – if you’re planning a two-year hand over for example, make sure this fits in with their expectations. Put an exit review strategy in place to ensure things continue going to plan after your hand over.
The desire to minimise your tax liabilities can have a significant bearing on your future plans. The implications can vary considerably from business to business and from family to family, depending on particular circumstances. There isn’t one single way of addressing the subject of succession planning, as a number of different factors can come into play.
It’s also important to consider the legal complexities of a transfer of ownership, so make sure you seek appropriate legal advice as part of your planning process. We can work closely with your lawyer to ensure your will and estate planning is also considered.
Succession planning is vital in order to ensure that your business survives not just now, but also in the future. If you would like help in building your own succession plan then our experienced team, headed up by Director John Tooth, can help advise you on the smooth transfer of your business.