Family Business Week - planning for succession - top tips

Anne Elliott, Partner at Latimer Hinks Solicitors

Nov 1st - Nov 6th is the inaugural Family Business Week and Anne Elliott of Latimer Hinks is recommending family businesses to plan for succession.

One of the most demanding and difficult tasks undertaken by any business is planning the succession of management and the passing of assets on to the next generation. The process can be especially complicated because of the close relationships and emotions involved.

Most people are not comfortable discussing topics such as ageing, death, and their financial affairs.

Many families have spent their working lives building up their businesses. Naturally they want the business to thrive after they have retired or died especially if the business is to remain in the family for future generations.

Succession planning helps you protect your assets and helps you take control of how you pass on the business when the time comes - planning today can make the world of difference to how the business operates in the months and years to come.

Anne's action points are:

• Set the targets and objectives you want to achieve from the succession process.
•  Divide the process up into stages and identify a timescale for each phase from pinpointing who will take over the running of the business to the final handover of control of the company (it might be a five year plan).
• Establish if the people you would like to take over the business have the right skill sets and abilities.
• Find out if the potential successors are willing to assume the role you have identified for them.
• Ask yourself, would it be better for the business for a member of the family to take over or to bring in someone from outside?
• Alternatively would the best course of action be to sell the business?
• Enlist expert advisers to make sure that any plans are legally watertight, are tax efficient and minimise the potential for challenge by or conflict among family members.

Seek good advice and seek it early. To ensure a smooth succession it is vital to start planning several years before your retirement date or death (a date no-one can anticipate!) Delay planning and your family and your business may all suffer as a result. If you and your family are prepared to put aside time now to prepare for the future the rewards can be very significant and you can make sure that the transition happens the way that you want it to.

Further details can be found on the fact sheet Succeeding at Succession