It’s often one of the last things businesses think about but Managing Partner and Head of Jacksons Corporate and Commercial team, Tony Wentworth, believes succession planning should be much higher up a firm’s list of priorities, and outlines the key reasons in a feature for Wear Business magazine.
“As part of the comprehensive service we offer to corporate and professional clients, we are keen to emphasise the importance to businesses of planning for the future, rather than concentrating too much on the “here and now”.” says Tony.
“A crucial part of that is ensuring business owners are properly prepared, personally and professionally, to pass the business on.”
“Succession is about getting people to plan for the long-term. People involved in business usually live in the ‘here and now’ – how do we make the business work, how do we generate revenue and turn that into profit? Succession is all about thinking into the future.”
Tony says there are two key strands in succession planning: “What’s my eventual strategy when I get to the point I’ve done it for long enough and want to get out, and what if I don’t even get to that point – say, if I lose my faculties or I get run over by a bus?
“The issues then are ‘who fills my role within the company, and how are my family provided for because my wealth is locked up within the business?’
“It’s all about forward planning – when the event has occurred it’s too late.”
Tony acknowledges that succession planning tends to be low on many firms’ ‘to do’ lists. However, he believes the relatively modest fees it involves is money well spent because it brings clarity and peace of mind.
He said: “It’s all about thinking ahead and considering worst-case scenarios – what can I do to protect my business and my family? If I do lose my faculties, should I already have a lasting power of attorney put in place so my business can continue running? If I do get run over by that bus, what happens to my business then? I need a will in place.
“It’s an expense many people decide isn’t worth it, unless and until they end up in a situation where they need it – and then it can be too late. I suspect that for many or most owner-managed businesses, it’s simply not on their radar – but it should be.
“If it turns out you need it, it’s the equivalent to putting a very small stake on a horse that comes in at a very long price.”
Organising an exit strategy, and thinking about your withdrawal from a business on the best possible financial terms for you and your family, is another scenario where Jacksons can be involved.
Tony said: “People tend to make quite short-term decisions. They’ll go home from work one day and think ‘I’ve had enough of this’ but by then, it would have been much better to have got things lined up.”
As well as succession planning advice, our specialisms include regulatory, commercial property, employment, corporate recovery and insolvency, debt recovery, dispute litigation, wills, trust and probate, family, matrimonial and residential conveyancing.
If you would like to discuss any of the topics raised in this article, please get in touch.
