AUTHOR

Peter Revelas
Peter Revelas
Partner

Many businesses are focused on the ‘now’ and in our current climate, that is completely understandable when life is about survival. However, when this current phase passes, we will revert to (a new or other) normal and the issues that have always faced business leaders will still be there.

Isuccession planningt is often the area we neglect the most that we spend our lives working towards realising – the main event, the big exit and the ka-ching of the cash register! 

Many clients will spend their lifetimes working to build a successful business that has provided for them and their family well over the years. But, without appropriate care, moving along with business as usual can inadvertently work against you if some simple matters are not dealt with from the start. 

This is the subtle art of succession planning. It is never too early to start with your succession plan, but the longer you leave it the greater the potential consequences.

Some critical questions to ask yourself to see if you are ready for succession are:

  • How is your business structured – what kind of sale is it conducive to and what are the tax consequences?
  • Who are your potential suitors and does your structure suit them?
  • Have you looked to family or non-family succession – does this have implications with the broader family and how have you managed that?
  • Have you looked to internal or external parties to the business for succession – does this have implications with any current key staff?
  • How are you identifying your successors, and do they need to be engaged with early – who will require mentoring or how can you ensure they will still be around when you are ready?
  • Do you have the right governance in place to ensure your due diligence will pass with success?

Unless you can answer all the questions above with absolute certainty, you are probably not succession ready.

Succession planning takes time: it is a process, not a transaction, that is established through good habits and persistence. First, however, you need to know your goal…

“To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you are going so that you better understand where you are now and so that the steps you take are always in the right direction.” ~ Stephen Covey

HOW CAN RSM HELP?

If you have any questions regarding succession planning for your manufacturing business, get in touch with a local RSM expert.