Your Roadmap to a Lasting Business Legacy: Mastering Succession Planning

January 23, 2024

Succession planning is a big deal, and getting it right takes time. If you’re a business owner, it’s crucial to kick off this process sooner rather than later. Let’s tackle some common questions about succession planning together.

Are You Ready for Succession?

Everyone’s different when it comes to succession readiness. Some have been mulling it over for ages, while for others, it sneaks up unexpectedly. The key is to start planning well in advance—think years, not months—to make sure handing over your business goes off without a hitch.

Procrastination and Why We Put off Succession Planning

Thinking about retirement and succession can be daunting, leading to procrastination. Uncertainty about options and the grind of daily challenges often get in the way. But having a plan is just the beginning. To make it work, you need resilience, adaptability, and commitment. Things might not always go as planned.

Employee Ownership: A Game-Changer for Succession

More businesses are shifting to employee ownership, making transitions smoother. Sales to employees can separate ownership from leadership, creating a more gradual handover. These sales often involve people who know the business, changing the dynamics compared to regular trade sales.

Is Employee Ownership Right for Your Business?

It depends on your situation. If your business relies heavily on your leadership or already has a solid management team for a buyout, employee ownership might not be the best fit. While it has its perks, carefully consider if it suits your business’s unique needs.

When Succession Planning Isn’t a Must

In cases where you already know who’s buying your business and a larger organisation is ready to take over without needing your senior management team, succession planning might not be a big deal. The focus can shift to getting your business ready for sale.

Tips for a Smooth Succession

Start early, be clear about your goals, and work with a pro advisor. These are the keys to a smooth transition. A trusted advisor helps you navigate potential challenges, and starting early gives you time to get your company in top shape for a sale.

When to Approach an Advisor? Three Years Before.

Three years before your planned move is the sweet spot. It gives you time to plan strategically, sort out debts and contracts, and boost profitability or strengthen your team if needed.

Top Three Tips for Succession Planning

Start early, work with a pro, and figure out your preferred exit partner. Be clear about what you want to achieve and plan for the future. Starting with the end in mind sets you on the path to success.

Questions or want to know more? Reach out to our team here. Your business legacy is worth the effort!