Planning who will succeed you in your family business is a tough challenge if you want your business to thrive and grow in the future. It is also a great opportunity to maximise individual talents and create a multi-generational business. Succession management planning looks to identify and develop potential successors in your company. Only about 30% of family businesses survive into the second generation, 12% into the third generation and 3% are viable into the fourth generation. Research shows that the dismal failure rate is mostly down to one factor – a lack of family business succession planning.
The most important issue to be considered before a plan is made is should you put family first – or business first?
Families don’t always agree on things – any plan you make should reward talent and not family position, although this can be a difficult and emotive issue. It is a good idea to have a contingency plan in place to cover the possible death or incapacity of key family managers.
Matthew Fretten, Partner and Head of Commercial, says ”Planning for the future of a family business is the same as forward planning in any business, the same key areas apply : administration and finance, day to day operations and customer satisfaction and sales and marketing. It is not about who will own shares and assets in the future, but about who will be doing the everyday, mundane tasks of preserving the family business.”
Get in touch if you need more information on this topic. For a free initial meeting please call 01202 499255 and Matt or a member of his team will be happy to discuss any questions you may have.