It is a phenomenon familiar to us all, natural almost, to plan for the future when one year comes to an end and a new one begins. For business owners and board members planning for the successful future of your company should certainly involve succession; it has to. With that in mind, why not tick succession off the New Year to do list whilst the impetus is strong and the year is new?
Resurgence of succession planning
Throughout the recession and the less prosperous years of late, planning for the future was somewhat regarded as a slight luxury which meant that wasn’t often at the top of the decision-makers priority list. However, with better financial conditions and a much more secure looking future, the topic of succession planning is back on the table and is wholly achievable as part of your 2016 resolution list.
Last year saw a whole host of next generations take the helm of a family business according to research from campdenfb.com. Amongst them were several top international firms who recognised the importance of their future, such as: Michael Hill International, Fox and News Corp, Subway and Pernod Richard. As the old adage goes - fail to prepare, prepare to fail.
With that in mind, we are aware that there are several obstacles that family businesses need to overcome before they can put their plans in place. Nevertheless, according to Families in Business, 89% of businesses feel more positive about the next 12 months, which is a great start to a successful future.
Business & stewardship challenges
Family businesses often face their own unique problems when it comes to:
- How their business is run in terms of direction and strategy
- How it grows and moves forward
- Recruiting skills and talent
Contracts of employees within family businesses can also be a sticking point, or lack a contracts would be more appropriate! Amazingly, 57% of directors in a recent survey by FiB, do not have a contract and 26% believe they don’t need one. Without a contract how is an employee expected to know their roles, responsibilities and rights? Yes, they may be helping to run the company in question, but a contract will help to give direction and of course make everything that little bit clearer.
Although a business is a business, each one has its own individual needs and distinctiveness, with family businesses having even more complexities that need to be addressed. Help and support in overcoming such difficulties, with communication being one of the major contributors, is available, however.
Expert help from professional services is always on hand to set you on the path to success. A solicitor will be able to work with you to draw up key documentation, such as shareholder agreements, employment contracts and the all-important succession plan.
By Mike Smoult, Senior Associate in Wills, Trusts & Probate, Gorvins Solicitors