Succession Planning

Family businesses are unique enterprises. They can range from smaller businesses up to very large businesses that have taken the decision to remain private so they can remain agile and answerable only to family members rather than a wider class of investors.

But they also bring the issue of the hugely significant but delicate family relationships and how these have to be managed at the same time as other business issues. There is a life cycle to a business as it grows and develops, and similarly there is a life cycle to a family as older members give way to younger members.

If these changes and tensions are not addressed, planned and managed this can prevent the business from operating effectively and can even result in the business failing completely.

Succession is not just about those who want a role in the business

Family businesses can be rocked by the expectations of family members whose interest may be a shareholding but no active role. What happens when those individuals want to be able to access what they consider to be their inheritance? How can you manage the family’s assets in a way that enables all to succeed?

Good succession planning starts early

Strong family businesses see succession planning as an evolving process and something that needs regular thought and management. What if a parent suddenly has a life limiting diagnosis? What if the child you thought you were setting up with a role for life has other plans? What if they just don’t have the skills you proudly imagined they did? What if the addition of an in-law and their career changes the paths of your successors?

Grasp the nettle now

Reaching agreement is unlikely to be without some uncomfortable discussions, but avoiding them certainly won’t help the business, or the family, in the future. Good family business advisers acknowledge the high level of anxiety that this process can cause and take a neutral role to help to manage the whole family through it to the best possible outcome.

This can help the family to understand the different perspectives of each member so they can agree the best way forward and may involve such things as restructuring the business or putting a family constitution in place.

Benefit of an external perspective

Most families benefit from a third party, external perspective to look to the good of the business without the dynamics of family relationships.

How we’ve helped:

• Helping a husband and wife empire evaluate the next generation and agree a plan of action that was right for the business