What is your succession plan?
Recent statistics from PWC Global show that 43 per cent of family-owned businesses don’t have a succession plan in place, and only 12 per cent survive to the third generation.
Regardless of whether your assets are $1 million or $100 million, a succession plan is essential to minimise the risk of financial loss and maintain family harmony.
When it’s time to sell or transfer ownership of your business, a stress-free transition is the most desirable method. The starting point for any succession plan is to reflect on your long-term goals, both personally and professionally.
Who are the best people to take over if you have to step away from the business suddenly – and how can you best prepare them for the task?
Once you’ve tackled the big picture questions, your next step is to seek planning advice from us. We can also help you liaise with other professionals.
At the same time, you’ll be able to start grooming your successor and training your employees for a smooth transition when you leave.
Tips for successful succession planning
Most business owners find it daunting to think about everything they’ll need to do before they can leave the company they’ve worked so hard to build. It takes time to create a useful, well-thought out succession plan—so start early, and don’t rush the process.
One of the most important elements of succession planning is clear and timely communication. Be sure to keep key stakeholders, business partners, employees, and family members involved in the planning process early and often. Set a reasonable timeline for the creation of your succession plan and try your best stick to it. Once you have a plan in place, schedule an annual review. It’s also wise to have contingency plans in place in case any sudden life changes require an unexpected exit. Many business owners time an annual review of their business plan along with a review of their succession plan to ensure both are always up to date.
A wealth of information is available for small business owners ready to start succession planning. There’s a wealth of free and low-cost tools to help you get started and stay on track throughout the process.