Is your business future proofed?
The figures speak for themselves- family run companies are big business.
The UK has 4.8 million family businesses – 88% per cent of all businesses in the UK. More than 1 in 10 large companies are family-owned, and nearly half of all medium-sized businesses. Family-run businesses make up over 90% of all private sector firms.*
It is vital that families treat succession like any other key element of their business, although we appreciate there can be extra difficulties and sensitivities when such planning involves your loved ones!
Here are some simple and handy points to keep you and your succession planning on track:
This one cannot be over-estimated…..it is never too early to start. One of the most common problems is people not giving succession planning the time it deserves early enough.
Rushed decisions, made under various pressures will inevitably lead to poorer outcomes.
Planning an effective succession strategy can be difficult to balance with more immediate business needs. But that’s no reason to put it off. Little and often is the key – allow time for regular conversations.
Be open and honest
Sometimes the hardest thing is starting the conversation. Don’t underestimate how much people will appreciate you putting the topic on the table for discussion.
Whatever you do, don’t make assumptions. The lack of a clear plan can lead to unease on both sides, with senior team members feeling a sense that there’s no future for them, or younger team members waiting for them to move on so they can make their mark.
Sensible, open conversations are key.
Utilise what you have
Think about how senior members of the team can pass on their skills and expertise, so it doesn’t leave your organisation when they do. If you’re considering the succession of a senior position, could they work alongside their successor for 6-12 months, then continue part-time in a mentor-style capacity to support key decisions as and when required? Whether the focus is on practical skills or customer service, their experience and insight can be invaluable – so don’t waste it.
Senior team members also need the humility to accept that younger, less experienced colleagues may be able to see a faster, better approach. It’s not just about technology – senior team members should embrace the fact that you’re never too old to learn.
Positive communication and collaboration are the key to cracking this one
Learn to let go
One of the biggest challenges with succession planning is the difficulty many people have in letting go – especially if they’ve started the business themselves. No one said it would be easy!
Using an external consultant to objectively approach issues around delegating and working alongside the successor can be extremely valuable.
Emotions can run high, clouding judgment and making it harder to focus on passing on knowledge – so an objective third party can help keep these feelings out of the process
Your succession plan doesn’t have to be carved in stone; it’s an evolving conversation and process. Update it regularly as circumstances change. Both the business and the individuals involved will need to adapt – but doing this within a clear plan will always provide better outcomes. It’s vital to ensure you are documenting agreed actions along the way and that you have any final agreements/plans properly drawn up.
How can Greenwoods GRM help?
Greenwoods GRM LLP can assist with all aspects of your succession planning including your personal affairs, corporate matters and employment aspects. Please do get in touch to start the conversation.
*Data obtained from https://www.ifb.org.uk/.
This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. For advice, get in touch with your usual Greenwoods GRM contact or scroll down to complete our enquiry form.