Succession should be treated with the same importance as growth strategies and strategic business planning; creating a clear, defined vision that ensures a smooth transition between leaders, both for the business and for stakeholders.
It is never too early to start planning your business succession. Plans can be adapted, changed and refocused, but they are essential in providing structure and support to your decision making.
For some entrepreneurial business owners, however, succession planning can present a challenge when planning to pass on their business or exit.
Building a successful business takes a great deal of hard work and determination. For many, the day to day management can often leave little time to step back and focus on the future vision of the business and personal aspirations.
The problem with failing to create an orderly plan is that change happens fast. Business owners may not get a second chance if their business fails to adapt quickly when key leadership leave.
Ensure focus is given to the opportunities and risks involved with business operations, both now and long-term, making sure these are built into your succession plan.
Assess how your personal objectives fit within the future of the business and succession. It is important to ensure that the succession route developed incorporates and satisfies these both now and in the future.
When you have decided that the time has come to hand over the reigns, it is important to make sure that a clear timetable is created and communicated to the leadership teams as appropriate.
This timetable should be clear and concise and have action points that are completed throughout the process as opposed to leaving everything until the last minute.
As a business owner, you will already have a vision for your business and its future success. It’s important that your proposed successor’s skills align with this vision, and that they have the drive to achieve it.
If you cannot find a successor within the business, you may want to look externally and, at this point, the timetable may need to be updated.
It’s imperative that those in senior positions begin to pass on their knowledge and transfer key relationships with stakeholders to their successors early, so that their skills do not leave the business when they do.
Developing the successor’s knowledge of the business across all areas will give them a greater understanding as to how the business operates and how they should lead it when you move on.
Once you have selected your successor you must communicate transition requirements to the wider management team. This should be done as soon as possible to ensure the business is ready and there is a smooth transition between leaders.
It is also important at this point to communicate with clients/customers/suppliers about the changes that are coming.
With new leaders in place, you should move away from the day to day operations of the business, so they become established in their new role.
This transition to new leaders will assist with driving benefits for the future of your business including new ideas, enhanced value and improved opportunities for equality and de-risking.
As you transition to your new venture or into retirement, it is important that you now focus on creating a strong financial plan for your future to ensure your personal finances are protected.
If you require assistance with planning your business’ succession, please contact your usual Mazars advisors or alternatively speak to our experts below via phone or the form below:
Brisbane – John Kotzur | Melbourne – Christopher Cicutto | Sydney – Jeremy Mortlock |
+61 7 3218 3900 | +61 3 9252 0800 | +61 2 9922 1166 |
Published: 15/3/2021
All rights reserved. This publication in whole or in part may not be reproduced, distributed or used in any manner whatsoever without the express prior and written consent of Mazars, except for the use of brief quotations in the press, in social media or in another communication tool, as long as Mazars and the source of the publication are duly mentioned. In all cases, Mazars’ intellectual property rights are protected and the Mazars Group shall not be liable for any use of this publication by third parties, either with or without Mazars’ prior authorisation. Also please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice. Content is accurate as at the date published.
Often small to medium business owners are tied up in the day-to-day running of their business and are unable to give meaningful consideration to the risks involved with their business operations. Some business owners are aware of their risks but lack the time or skills to address them.
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