Exit PlanExit Strategysmall businessSuccession Planning

Every Business Needs a Succession Plan

Succession planning is something to which every business should give consideration.

Many business operators prepare Succession or Exit Plans regularly so they are in a position to react promptly to any opportunity to change direction in their business.

While succession planning can apply to shareholders, key management personnel and all team members, this article will concentrate on the key owner/CEO within the business.

There can be many succession issues relating to a business.

  • Are members of the family involved in the business?
  • Do any of the family members have aspirations to manage and own a significant amount of the business?
  • Has the family member got enough money or borrowing capacity to be able to buy out the shareholding held by the current owner?
  • Has the current shareholder got sufficient funds not to require a prompt payout but to self-finance their successor?
  • Is the potential new key shareholder acceptable to any other shareholders and the management team?
  • Are all the secrets and agreements that have been entered into recorded in writing or are they in “the head” of the current key shareholder?
  • Has all of the business’ intellectual property been recorded and protected?
  • In the event of a change in the key person within the business would this trigger any changes from key suppliers or bankers?
  • Has any consideration been given to the company attempting to raise capital as a Crowd Sourced Funding Company so as to fund (or partly fund) the retiring key shareholder/CEO?
  • Does the business have a Family Charter or Constitution? If not, is there support for the creation of this type of document?
  • Does the family support the formation of a “Family Council”? This can be particularly relevant where a number of members of the family are not employed as executives of the company.

There are many other issues relative to succession planning in a business.

If you would like to have a discussion with us relative to the development of a Succession Plan and or Exit Strategy for your business, please do not hesitate to contact us.


An Important Message

While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents.  Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.