Succession planning for your business

As the saying goes, failing to plan is planning to fail.

You have run your business successfully and are thinking about the future, perhaps you want to move on to new ventures or maybe you are looking to step away from day to day operations and retire.  Either way, succession planning is the key to ensuring you leave your business on your terms.

Some key considerations in succession planning are:

• Do you only want to step away from the day to day operations? Do you have an employee who is ready for the challenge of being a general manager?  Can you hire someone to fill your role in a management position? Have you considered what authority and powers you would delegate to them and what business decisions you would prefer to make yourself?
• Will you be handing over the reins or do you want to retain some control? If you operate your business in a company structure, it may be prudent to expand or set up a board of directors.  You should consider who will sit on the board and the skills required of each director.  Will your family members sit on the board or will you appoint external directors?  Will you sit on the board or will you retain control only as a shareholder?
• Do you want to keep it in the family? If you are a family business perhaps you want to look for a successor closer to home.  Consider carefully: do your family members have the necessary skills and knowledge to run the business?  If you have more than one child, will the business go to one of them or all in equal shares?
• Do you want to get out of the business entirely? Have you considered selling your shares in the business to other shareholders?  Or, is there an interested third party looking to purchase your business?

If you are thinking about stepping away from your business now or in the future and would like to speak to someone about the questions raised in this article, please get in touch with Nicholson Ryan Lawyers to discuss how we can assist you in developing your succession plan.