(BPT) - Building your business has been your life’s passion. You have dedicated much time, energy and finances to ensure its success, and you want that success to continue even after you are no longer involved in the daily operations. This is why succession planning is essential.
Consider these two scenarios: First, you’re 75 and your son and daughter have been involved in running the business for 20 years, making some management decisions for the last five years. You have all discussed and have agreed on plans for the future of the business. Now imagine you’re 75 and you oversee all operations and make all the decisions without the input of your family. You have had no discussion with your son or daughter on whether they desire or intend to take over the business.
Should something unexpected happen, which scenario gives your business the best chance for survival?
“Most family business owners pride themselves in not just building a business, but rather, creating a family legacy to pass along,” said Jeanne Bernick, ag consultant at Pinion. “It’s important to put a plan on paper as soon as possible for the future of your business."
Bernick has worked with hundreds of business owners helping them determine the best exit strategies to achieve their goals. She shares the top reasons why prioritizing succession planning now matters.
1. Decisions require time
When it comes to succession, finding the ‘window’ is one of the hardest parts, because unfortunately, most businesses often only find the window when there is a sudden illness or death in the family. As a result of the COVID disruption, now is actually the perfect opportunity to recognize those who have stepped up, and think through the implications of this long term to address what adjustments could be made.
2. Openness matters
Of the 81% of family operations that have no succession or transition plan, 50% think it’s too early to think about it and 29% feel they can’t afford the time. Management decisions, ownership decisions and family decisions require early communication and openness for long-term success.
3. The unexpected happens
No matter when you intend to transition, remember that the business is more valuable — for your personal wealth and the longevity of the business for the family — if it’s running smoothly and you have the right management and successors in place should anything unexpected happen.
4. It's never too soon
There is no magic number when it comes to age and succession planning. The sooner you start the sooner you can take advantage of the advanced planning techniques that can help build and transfer value to your business for its future and its stability to support your family. If situations change, you can easily adapt your plan.
5. Get relief
By getting started now, you get your ducks in a row and put a plan in place. If you hesitate because the process forces real family conversations that could be uncomfortable or tense, imagine the relief that comes from the identification of back-up leaders and management to be prepared for when the time comes — not just who you think might want to, but actually identify those who have the heart, desire and talent to step up.
6. Coaches provide guidance
There are specially trained family business coaches and advisors that can help you get started. A simple consultation to talk about your business and operations is all it takes. Yes, it can be complex at times because, let’s face it, families can be complex. But it’s never going to be easier to address these important topics than right now.
7. A professional facilitator helps
Uncomfortable at the idea of having difficult conversations with loved ones? A professional facilitator can schedule a time to visit with you and your family, and help you to easily navigate the process and any tough conversations that need to happen.
Strategic succession planning is essential to the future of your business. Learn more at PinionGlobal.com.