Family Business Forum: Common Themes with Succession Planning
By Richard Horwood, Partner and Head of Private Client
At the Family Business Forum breakfast held on 11 September I was joined by Richard Gvero, Daniel Burns, Agata Rumbelow and Nat Young together with a number of local advisors and businesses discussing, amongst other things, succession planning for the family business.
During the course of the discussion a common denominator, which cannot be overemphasised, is the importance of families talking to one another.It is only by being open and honest within the family, and within the business, that one can plan appropriately.The consensus amongst the group was that if one generation failed to take into account the wishes and views of the next generation then it is much more likely that a transition will be less successful.
One of the key triggers for discussion, as experienced by many around the table was when a business needed to raise funds.It was at this time that proper planning needed to be undertaken and became a catalyst.However, those of us involved with family businesses would encourage all family businesses to prepare at a time when there are not the outside influences or pressures to get something organised.In this way more time can be devoted to the topic.
Of course, we all recognise that time is valuable and there is rarely sufficient time to deal with the day to day running of any business and address the long term succession issues.However, it is those family businesses, in our experience, that do plan at an early stage that are much more successful in the long term.Recognising the strengths and areas that require further development at an early stage enables appropriate planning to be put in place.Whether or not this leads on to a successful transfer of ownership, or some other form of exit active strategy, will always depend upon the circumstances, but it is rare that the business can be over prepared!
Success does, naturally, come in many shapes and forms and understanding the views and wishes of the different generations is paramount.What became clear during the course of the discussions was the importance of having some outside input, possibly helping to facilitate those discussions amongst the family and business, to provide a detached and non-emotional forum.
If you would like our assistance with this please get in touch and if you would like to be invited to future similar events, please email firstname.lastname@example.org.