When Meghan Markle gave birth to Archie Harrison Mountbatten-Windsor in May, he became the seventh heir to the British throne. The Royals have always had a clear line of succession which is understood by all parties including (most of) the general public.
Like the British throne, businesses also require clear succession planning. However, many, particularly the owners of SMEs, consider their succession much too late and accordingly find their hand is played for them with less than desirable results. Conversely, successful planning and implementation of the succession plan can increase wealth for retirement, maintain or improve the level of business performance, keep staff employed and build a legacy.
The start of succession planning starts with one simple question – who? Who has the capabilities, integrity and aspiration to take the reigns when you’ve decided you’ve had enough? In many cases the answer will be clear, in others, the options may be less obvious, and consideration needs to be given to each candidate to determine the appropriate person, people, or corporation.
Many owners of SMEs will look to family members to become their heir. Whilst this answers the question of “who?”, the process of how the business gets transferred or sold to them requires much more planning and effort. Alternatively, if the heir is a third party, approaches need to be taken to ensure you receive best value for your business. This may include implementing profit, growth, cash-flow and/or restructuring strategies years prior to entering the process for sale.
A clear succession plan is understood by all parties and successful implementation of the plan requires all stakeholders, including employees, customers and suppliers, to understand that business will continue as normal once you have abdicated the throne.
If you’ve recognised issues with your succession plan, or require assistance preparing or implementing one, consider our ‘Peak Performance’ program. We will work with you to answer the critical questions of who, what and how and help define your succession goals and implement the plan.
The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.