Passing on the Business: 4 Tips for a Succession Plan

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It can take years of hard work and total commitment to build your business into something tangible that you can pass on to the next generation and it takes plenty of planning in order to put everything in place for when the time comes to give someone else the reins.

Having a good understanding of your options and keeping up to speed on the latest legal developments through a site such as lawmanaging will help, but you might also want to get some tips and guidance on how to create a viable succession plan.

It is never too early to start planning

Passing on your business is not a decision you come to lightly and it is not something you do with any sort of haste.

It will most likely be something that has been on your mind for some considerable time before the actual moment arrives when it is time to sign on the dotted line.

Although there are no hard and fast rules with regard to a timeline when it comes to planning it is the sort of decision that deserves plenty of thought and guidance, which is why it is perfectly normal to start planning for your exit point ten years or more before the intended departure date.

Talk about it

It is never a good idea to make assumptions about your succession plans and it is far better to engage in honest conversation with everyone involved so that there are no misunderstandings or upsets.

You need to know that everyone is on board with your plans. That way you can iron out any wrinkles well in advance of the proposed handover date.

Cover all the bases

It is important that you try to maintain an open mind about how succession could work and if you give yourself plenty of time to formulate the best plan it will also enable you to explore all available options before deciding which way to go.

It can often prove beneficial to get some professional guidance so that you know all of your succession options.

Accept that it might not be cut and dried

One of the hardest aspects of succession planning to come to terms with is the fact that keeping your business in the family might not be what those involved actually want to do.

Children grow up to have their own interests and ambitions and that means they may not want to have their career path chosen for them.

That is why it is a smart move to open up some honest and meaningful dialogue with your family as early as possible. If a generational handover is not on the cards for some reason it would be good to know that in plenty of time so that you have the opportunity to explore other options for passing on your business.

Succession planning can be emotionally challenging when you consider how much time, effort, and money you have invested into building something worthwhile that you want to know will be in good hands when you go.