For business owners and board members – Planning for the successful future of your company should be at the forefront of your thoughts.
Now that you have established a company why wouldn’t you want to ensure the long-term success of your enterprise?
Passing down your business doesn’t just happen automatically – planning is the vital ingredient for business succession.
By future-proofing your business, you put things into place that will anticipate happenings and developments in the future, reduce stresses and damages to your company, and give it a much better chance of surviving several generations.
Importance of Succession Planning
The most direct way of future-proofing your business is to create a formal succession plan.
Succession planning is the process of identifying and developing the people to potentially take over from you, giving them the ability and knowledge to fill key business positions.
A successful succession planning will ensure your business survives and thrives when it is your time to step down or you take ill or even die unexpectedly.
Rather scarily, 96% of family businesses have no succession plan. That really is an incredible figure, further exacerbated by 36% of family businesses believing there is no need for a succession plan.
If you don’t plan properly, the hope of a smooth successful transition is almost non-existent.
Creating a business succession plan isn’t a 10-minute job, but it is important to get the ball rolling.
Talk to the necessary people involved and get the professional advice you require – so that the hard work you’ve put into your enterprise can be continued efficiently.
There are challenges associated with succession planning, however ignoring these and putting your planning off isn’t going to help your business in the long run.
You may face difficulties agreeing with your partners about the direction of your company, the growth strategy and how to recruit skills and talent to keep your business at the top of your game.
There is only one way to overcome these and that is to communicate.
Sometimes getting an impartial third party involved can help oil the hinges in this instance and get the conversation going in the right direction.
Fail To Prepare, Prepare To Fail
Yes, they’ve had to have the right product or service and reinvent themselves as time changes, but they’ve also had to plan for successful change-overs when those in charge step-down.
Thinking far into the future about potential scenarios that may occur may not be the easiest of activities.
The present day often brings enough challenges as it is, both on a personal note and business level, so some prefer not to think about the future too much at all.
However, not thinking about the future makes matters worse because you are letting things build up which would probably be detrimental to your business.
If business succession is not planned for, it may begin to struggle while processes are instigated – get ahead of the game and plan.
Planning for business succession should be thought of as a positive process to give confidence and security for a future of success.
Mike Smoult is a Senior Associate Solicitor specialising in Wills and Inheritance Planning at Gorvins Solicitors, a North West based full service law firm.
Image – Pixabay
Updated – 11 March 2019