In Succession, Plan Early-Start Earlier
If there is a single piece of advice that those who have completed a Family Business Succession process would pass on, it is ‘start early, start as early as you can’.
This was one of the most prominent pieces of advice draw from research into the dynamics, barriers and success strategies in Family Business Succession, with some 2500 family business leaders across 56 countries in nine languages participating.
Family Business Leaders often leave the process of succession until they are ready to step aside or an event occurs that forces their hand. The mindset seems to be one of exiting whereas succession is all about building for the future no matter what option (sell, merger, transition) you may be considering.
It is a transition journey which commences with the establishment of goals and continues into the engagement of a wide field of stakeholders, the seeding of legacy, cleaning up decades of taxation planning and commercial/corporate structuring, setting and securing the direction for the future of the business, training and experience for an incoming leadership team and a purposeful future for the exiting leadership team. And where family is actively involved, ensuring a foundation of harmony and strong communication and governance is established, tested and bedded down.
And guess what, all of this takes time. Try and do it quickly and the pieces of this puzzle won’t stick and will fall apart. Wealth will be lost, and the family and business will suffer. But take the time that Transition (the most important capital transaction you will ever undertake) requires and the rewards will be present and well worthwhile.
When should you start thinking and acting on Transition? The day your business started or as soon as you can.
Here is a short video clip that talks to the above research and the importance of starting early:
