Succession planning: Questions every business owner should ask
Who? – When you step down, who do you want to take over the business you have spent so long building? Are they capable of doing it? Do they have the skills, finance and character required? Choosing the right successor is key to the future success of the business and so it is important to take time to consider all the potential candidates.
What? – What exactly is it that you’re handing down? Is it the entire business or just some of it? Would you like to retain key assets like buildings or intellectual property to give yourself rental or licence income once you no longer own the business? Is the business ready to be passed on or do you need to do some housekeeping first?
Why? – Why are you passing on the business? What are your aims? Is it to preserve the family business or maybe just to retire and focus on your free time? The reasons for passing on the business can dictate the nature of the deal you choose to do and so it is important to have these clear in your mind before you start making any plans.
When? – When is the right time to step down? Are you ready to release the reigns? Even if the right time is ‘not yet’, it is never too early to start planning.
How? - The answers to the previous questions will dictate the structure of any transfer of the business. There’s a myriad of choices available to you, including employee-ownership options. You should seek legal advice to work out the best structure for you and your business.
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