A robust plan for succession is the mark of any strong and healthy business, even if it doesn’t feel particularly necessary right now. Here are our tips for succession planning for your family owned business.
Put a Succession Plan in Place
While it may seem like the obvious solution to allaying any fears over succession, it’s also very easy for family-run businesses to assume that they’re unnecessary. Just as people can (wrongfully) write-off the need for a will by reassuring themselves that their loved ones will ‘sort it out’ between themselves, so too can business owners put off creating a succession plan indefinitely.
However, a succession plan is key to achieving a well-managed ownership transition – benefitting the employees, shareholders and all who rely upon the smooth running of the business.
You can read a more robust guide to succession plans here https://www.willans.co.uk/service/corporate/, and find out why a corporate solicitor will prove essential to guiding you through the process (and the legal aspect) of business succession planning.
Consider making a Business Lasting Power of Attorney
Any person with an interest in the continuation of the business,whether they are company directors, partners, LLP partners or sole traders, could benefit from creating a lasting power of attorney to document what will happen to their business interests if they are unable to run the business any longer and need someone to step in to make their business decisions.
Some exits or long-term absences from the business are planned in advance, but there are, unfortunately, many reasons why these absences could be unplanned, and very sudden.
This can derail a business, and cause lasting issues, unless you (and your business partners) solidify your wishes for who will take over the business to safeguard it, whether you or a key family member dies suddenly or loses mental capacity.
Write (and Keep Updating) Your Will
We mentioned above that many people put off writing a proper will until it’s too late. However, from your personal finances to your investments, properties, and possessions – and, of course, your business shares and assets – a clear and professionally-drawn will is the best way to ensure that your family will be able to inherit everything that matters, without any disruptions, delays, or complications.
For that reason, writing one isn’t enough – you need to keep it up-to-date, as and when anything changes.
Prepare Junior Staff for Senior Positions
Chances are, you’ve already earmarked the people who will one day take over the running of the business, but are they ready? If not, it’s no good telling yourself that they will be ready when the time comes, since there’s no way of knowing when that time will be.
Have you considered training and development? Preparing the business’s future leaders to take on more and more responsibilities – one day without your help and supervision – is as important to succession as the written plan itself.
Have a Good Communications Plan
Ensuring that your business is always structured by a robust line of communication with staff and customers is essential, particularly when the business is undergoing major changes.
Even the best succession plan can incur some disruptions within the business when the time comes, so planning ahead and making certain that the business’s line of communication is not overlooked will ensure that nobody needs to worry or become restless unnecessarily.