Family-run businesses account for almost a quarter of the UK’s GDP, and provide over 9 million jobs, however many of them could be in danger due to inadequately planning to pass on businesses to future generations.
With this in mind, Stephen Attree, a partner at MLP Solicitors has provided some useful succession planning tips for family firms, which we have summarised below:
Succession planning tips for family-run firms
1. Planning and phasing
If you are preparing to exit your family business don’t just say you’re going to do it – create a clear exit and succession strategy and timeline outlining when you’re going to leave, what needs to happen before this and how the business will move forward.
Share this with the whole business and start phasing yourself out of the everyday working life of the firm so it’s not a shock when you leave.
2. Identify and protect your culture
What makes your business stand out amongst your competitors? Once you have identified your unique culture make it an official part of your business plan – develop vision and values which will help direct business plans in the future.
A family charter, or constitution, which defines the vision, mission and values of the business, and family, is a vital tool to secure the legacy of the business and family harmony.
3. Provide clear roles
All family members and staff need to be ‘singing from the same hymn sheet’ when it comes to what the company is all about and the vision for the future.
Don’t just spend time developing the next leader, invest time and training into all family members so everyone is clear of the role they play in the business success.
4. Keep it all ‘above board’
In the end this is a commercial transaction and not a family one – protect the business from any disagreements by approaching the handing down of a family business as a professional and commercial transaction – not an informal agreement within the family. This means all parties know and have agreed in advance how it will work.
More help on managing your business
For more tips on running a thriving business, try some of ByteStart’s guides to growing a business;
- The 3 issues you’ll need to overcome if you want your start-up to reach £1m turnover
- Barriers to growth – how to identify them and how to overcome them
- How finding a great mentor could help you to grow, and your business to flourish
- How you can build your business in 90 minutes a day
- Increasing your personal efficiency – how to get more done in less time
- The start-up survival guide – 6 practical tips to help you get through the early years