The determination and dedication that are so often characteristics of family business founders undoubtedly leads to great success, but this can also unfortunately be the undoing of great companies when these founders struggle to relinquish control.
There are many reasons why founders struggle to let go; they may feel their successors cannot do as well as they do, fear uncertain futures or even feel uneasy about putting too much pressure on their successor too soon. However, failure to act at the appropriate time can lead to future problems and complications meaning biting the bullet early makes for smoother futures for all involved.
While failure to let go can be extremely frustrating and demotivating for the next generation, it is important for successors to understand the Pandora’s Box of issues relating to each action of transfer. Succession is not just about retiring, wills and tax, it is also about keeping the family business together and considering not only the best option for the business, but for the many number of people involved, from family members, to seniors and employees. This then raises questions about life aspirations, career plans, readiness and capabilities of those involved, and the uncomfortable conversations that come with it.
While all members of the succession need to be actively involved in the process, it is those in power who need to get the ball rolling. However, this does not mean the onus is all on them! The next generation must be prepared to speak openly as to what they want, not just passively agree to what they think their senior wants of them. Succession is best seen as a negotiation, because without this, a consensus can never be achieved.
What is of greatest importance, is that all those involved accept the need for change and progression. It is important to realise that there is no winning but only working together for the greater good of all, so instead of “no matter what, I want it my way”, key players need to consider, “while I don’t completely agree, I don’t disagree enough to sabotage the outcome”.
How can we help?
Here at Sutton McGrath Hartley, we can provide help and support through our expertise and understanding that succession is a project that needs to be managed, ensuring that the family is guided through the whole process.
- We can help you identify the event you need to trigger succession, and provide guidance to help the whole family understand the need for unavoidable change.
- We will manage the inevitable uncertainty involved during transition as we explore different options with you, and educate your key players to create an understanding and acceptance of the process and what they need to do.
- We will advise on the best options for your families’ future, not just what seems the best option for right now, helping you avoid the premature choice.
- We will plan a timetable with you to put in place the building blocks for transition where strategy planning, teaching the next generation and legal and financial structures will be tackled.
Overall, we can help provide the prefect balance of stability and harmony for your business and your family by helping you through the uncomfortable but inevitable process of business succession.
Sutton McGrath Hartley is a multi-disciplinary firm of chartered accountants, financial advisers and lawyers offering comprehensive financial expertise for all business, personal and family interests. Our experienced advisers can help with exit and succession planning. To discuss your requirements please contact David Sutton on 0114 266 4432 or [email protected].