So many businesses, especially family and owner managed businesses, get so caught up with the term succession they do absolutely nothing about it. They may have an awareness but because it’s so daunting and involves emotions, communication and people (including relatives!) they freeze and bury their head in the sand. It’s common to hear stories of families and / businesses trying to look at succession for 10years and still not being any further forwards.
The thought of trying to begin planning is more petrifying than the potential implications of not having any plans in place – because that would be tomorrow’s problem and opening a can of worms is very much a fear for today. Of course there are practical reasons as to why people avoid succession as a topic too. Family and owner managed businesses are busy and short of time and resources so have no physical or metal capacity to start plus they are the wrong people to do it because they are so entrenched.
Imagine that you want to create a better looking bottom line – your profit. Where do you begin? Do you focus on profit? No.
Profit is the result, or “scores on the doors”. You have to be aware of it and how incredibly important of it because it’s a gauge of how you’re doing and what you can take as dividend and reinvest into the business – and even part of your valuation for sale should you wish to. Succession is the same.
Profit is the result achieved by driving revenue and controlling costs. Succession is the result of alignment, communication and what we refer to as GLAS. Most interventions and specialist projects that we run for clients do not focus on succession even though it’s acknowledged as critical. We work on a whole series of areas to create alignment but that focuses on a spectrum of areas that in turn create succession plans. No matter what the brief we will create an environment and process that throws out succession plans – and strangely enough everyone tells us at that point “well that was easy and obvious”. Yes, because we’ve stopped focusing on the “score” and we’re now actively in the game which creates a better “score” as a result.
Getting so caught up in starting to build a succession plan is the biggest barrier to actually creating one so don’t! Trust in a specialist team to align you, your family (and / or management team), your business, your external community and your reason for being – the purpose. That creates a living, breathing succession plan which I would then consider as being the best way to future proof you, your family, your business and your wealth.