As every business is different, so are their owners. Yet, one constant among owners is that, at some time, they will need to exit their company and pass on the reins to a successor.
In the same way estate planning can protect an individual's assets, a detailed and well-worded succession plan can safeguard an organisation into the future.
What makes succession planning successful?
Transitioning from one owner to another can be a bumpy process. Whether it is a family member, a management group or a third party, a succession plan can impact your wealth, your company's and your future.
Transitioning from one owner to another can be a bumpy process.
A report released by PricewaterhouseCoopers identified a series of guiding principles that can offer businesses an advantage over their competitors. Some of these include:
- Ensure that succession planning is part of your business's foundations
- Integrate CEO and management succession into a single process
- Speed up successor development
- Make decisions based on possible future scenarios and situations
- Ensure the succession planning process encompasses political as well as emotional drivers
While this report was directed at larger corporations, smaller companies can also benefit from a succession plan. Furthermore, family-owned businesses may also have messier transitions as emotions and family dynamics can become an issue.
For all these scenarios, it is important to talk to an experienced lawyer who can help guide you through the process.
When should I start succession planning?
Most business owners will not think about succession until it is upon them. However, your plans and future goals should be laid out well in advance to ensure your business survives and delivers a return on your investment of capital, effort and time.
To get the ball rolling, you should enlist the help of an experienced lawyer who can guide you through the process. This is essential as succession planning is complex and can lead to a range of questions. Without a lawyer's advice, you may be stuck not knowing who is the best candidate or if your management team will be able to handle the transition.
If you would like to know more about succession planning, talk to the experts in the field. Contact McCarthy Durie Lawyers today and find out how their services can protect your interests.