Succession planning manages the smooth continuation and success of a business which depends greatly on the availability of the next generation of competently trained people. In most family owned businesses there may be no successor to drive it once the current generation leaves – either by choice or by circumstances.
What is likely to happen to the organisation when a key family member is eliminated without formal succession planning in place? Here are some things to expect:
- First, there would be no able successor, or
- Where there is, the successor is often either unprepared to handle the heavy responsibilities placed upon them, or
- The successor does not have the ability to manage the organisation in the way it used to be.
- These events will affect profitability and in the worst case the business can become untenable to continue.
- With so much at stake, succession planning has to be a priority and should be part of every strategic business plan in a family owned business.
We focus on a range of succession planning options including:
- Retention Planning: Retention of the business within the family circle; and
- Buy-sell Planning: Selling of the establishment to other business owners or key employees or interested outsiders.
We strongly believe that proper business continuation and succession planning can help prevent a family business from being frozen and discontinued. It also helps avoid conflict among family members and between heirs and surviving owners when the succession plan is well managed.