Aside from the day-to-day core responsibilities such as driving sales, improving services and achieving profits, a matter which is which is often overlooked by businesses is succession planning. Whether you’re a small business owner, family business or larger corporation, care, preparation and advice on succession planning can help disaster proof your business, identify future leaders and help you to achieve your goals.
Leading law firm Nelsons offers corporate advice across a range of specialisms, one of those specialisms is succession planning. Senior associate Palbir Vadesha gives some top tips below:
Identify the ideal end goal:
Firstly, it’s important to identify the long-term goals for yourself and your business, whether that’s retirement or balancing work with enjoying leisure activities. Incorporate timescales into your plan to make the transition smoother. Trying to rush succession planning can be stressful and pressurised.
Be prepared to be flexible with your plan; it may change with circumstances and having the time to consider your options is better.
Using internal expertise:
Think about how you can pass on your knowledge and expertise to others that already work in the business so that your skills don’t leave the business when you do. This may involve training staff through formal qualifications or getting them to work alongside you and other senior employees.
Apply incentives:
You may have a desired successor who is already working within the business. Consider the different ways you can incentivise ‘key’ individuals to remain with and continue to build the business. This could include employee incentive schemes such as growth shares, or an employee share scheme.
Recruitment:
If succession within the business is not an option, for example your current staff just don’t have the skills required or desire to take on the business, you should consider looking externally to recruit key staff that are required. You can even build succession into the hiring process to help source the right people.
Reach out to third parties:
You may also wish to consider having a third party business or organisation acquire your business, leaving you to exit the business completely or work less time within the business. Sometimes previous owners stay on for an agreed period of time after a sale as consultants.
Organisation and order:
Start “getting your house in order” in readiness for passing on the business to your future successor make sure you can easily access and pass on any key documents and agreements that the business and its future leaders will rely on. Also, if you decide to sell your business to a third party you will usually be asked to disclose key documents as part of the due diligence process.
Don’t go it alone
Succession planning can be a minefield, engage quality professional advisors who can advise you on tax, financial matters and legal support from the start. Careful planning and advice from the outset can help you to structure your affairs in the most efficient and cost effective way possible.
Nelsons provides a range of legal services through its corporate team, one of their specialisms is succession planning.
To find out more about Nelsons corporate services or for a no obligation call, please visit: www.nelsonslaw.co.uk/corporate-services
