When you started your business all those years ago, probably the last thing on your mind was how it would continue when the time came to retire or leave the business for other reasons. The truth is, everyone plans how to get into business, but very few plan, early enough, how to get out.
The good news is, the business has been a success, you’re still here and doing well – not everyone gets this far. But now you have to consider the future without one very important person: you. After all, you worked too hard just to close it down. So how do you pass the baton on, and to who, ensuring that your legacy carries on?
This is where succession planning comes in – and the sooner you start thinking about it the better. Ideally, you need to start putting something in place, even if it’s just a rough plan, at least five years before exiting the business. Here are some options you might want to consider.
Begun is half done
Succession planning is definitely not one of those things that should be put off, or kicked into the long grass. The sooner you begin thinking about it, the easier it will be later on. And remember, not everything will go to plan. Things change, key people leave, events may dictate a new direction. So start with a flexible plan and be ready to tweak it as and when. The important thing is that you’ve got a plan that can evolve.
Don’t keep it to yourself
No one expects you to be around forever. It’s only natural that you start looking forward to enjoying the fruits of your labour, whether it’s in retirement, or just stepping back from day-to-day involvement. The fact that you’re planning for that day, and for the business to thrive long after, can be far more reassuring to others than blindingly carrying on. So share your plans and discuss your options with key people, even asking for their advice and ideas. They may be more ready for it than you.
Could your employees be the answer?
They know your business as well as you and may be ready for the challenge of taking over the reins. Employee ownership is one of the least disruptive and rewarding options. You can arrive at a mutually acceptable market price – and enjoy tax benefits that aren’t available with an outside acquisition. And on a personal level, you may be walking away from the business, but you can still keep in touch with the new owners.
Planning to keep it in the family
If it’s a family business with a natural successor, there might be an organic handover process over time. However, a structured development plan will give you time to properly assess a family member’s suitability to eventually lead the company. Their progress needs to be measured objectively with key milestones – with no room for sentiment.
Family and business don’t always mix
There could be many reasons why you may want to look beyond the family for a successor. They might be too young, inexperienced, have other interests or lack the acumen. So rather than push an option that won’t work (with all the will in the world), it might be better to identify a general manager to start taking control at the earliest opportunity. Someone you can be absolutely candid with, without treading carefully around family sensibilities.
See it as everyone’s business, not yours
Yes, it was your baby to begin with. But a long-term business, in some way, belongs to everyone that’s helped to make it a success. So don’t feel too precious about taking ownership of all the issues, particularly succession. Share, delegate, consult and be inclusive. Let others take some responsibility and let them know your plans. And if you need to use external consultants, bring key staff into the conversation.
It’s a plan
At Citywide we appreciate that succession planning is definitely not a one-size-fits-all situation. These are just a few of the things you can consider, but we’re always happy to discuss specific plans with you. Why not talk to us today about how to develop a plan that works for you, your business and your employees? Call us today on 01372 365950.