Succession planning and successful execution of the plan are probably the most challenging projects a business advisor can take on.
In my time I have delivered seminars on succession planning, written articles and plans, chaired family meetings that range from chairs being thrown and doors slammed to the potential successors saying ‘nah, not interested, too hard’.
It’s a little bit of a cliche but has some integrity. You do actually need to plan your exit when you’re writing your first business plan and the paint’s still wet on the front door. If you have family, you need to consider whether they should be considered to take things on and if you think it’s a yes, start to plan for how that could work.
The transition starts with inclusion, responsibility and mentoring.
‘Succession -they just don’t have it in them’
Let’s say a family business started in the late eighties, trading products and services locally on a retail and commercial basis. The business was about hard graft, relationships and handshakes, jobs for life and so on.
Thirty years on, it’s a global market with global competition online and offline. Market share retention is key as is getting paid promptly and being able to say no when needed. The skill sets are that much bigger and that much better suited to the next generation.
The transition starts with inclusion, responsibility and mentoring. From there begins authority and the chink of light that heralds a successful transfer to the next generation. You need to prepare and start early.
A smooth succession to the next generation, whether that’s family or employees, is often the goal of many a business owner. However, it’s a hugely emotional process for all parties and the transition, if not well planned, rehearsed and executed, can often devalue the business or increase it’s vulnerability to external market forces. My key tips for any business owner contemplating this exit path are;
- Sound out the potential successors well in advance and don;t just assume they’ll be happy to take things on.
- Try to develop a culture of ownership in your business, where everyone treats the business as if it were their own.
- Assess your own future personal financial needs carefully and get advice if necessary. If there’s mismatch between what you can achieve with a succession plan and what you actually need, it’s likely you’ll need to look at other options.
- Be prepared for an emotional rollercoaster and to coach yourself to let go.
I’ve developed a program for business owners to work through that, with my assistance at key stages, can help you achieve a successful outcome and equally importantly cover the initial cost by adding value to your business and its future prospects.
At the time of writing [March 2016] I am developing a short e-book that includes some useful guides and resources on exiting your business via a succession plan.
If you would like to speak to me about your own plans, you can reach me using the form below.
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