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One thing is clear: a lack of succession planning is a threat to the future of a business. Yet, the vast majority of business owners – 96% – have put no plan in place. Just four in 100 business have made that all important plan for the survival of their business, according to Families in Business.

Research has shown that just talking about what will happen to the business is one of the biggest problems. There’s a gluttony of evidence that shows raising the issue of succession, the first step in the planning process, is a hurdle many families never get over. Let’s have a look at a few facts:

  • 36% of successors think that the owner doesn’t actually want to talk about them taking over the business
  • 55% say they stay silent rather than upset anyone
  • 46% have not made a plan because raising the issue is too difficult
  • 27% of successors think talking about the business future will create a family conflict

With these facts in mind, let’s take a look at the steps a family business can take to start the succession conversation.

Ways to get your family talking about your business

  • Get Everyone Involved

Family businesses can often involve many different stakeholders all with their own unique views. However tempting it may to invite a select few to a meeting, all of who house similar views to your own, this will not pay dividends in the long run. Making key decisions without all necessary parties can create issues and exacerbate conflicts.

Furthermore, avoiding other stakeholder views may cause problems to deepen in the future. With communication being one of the biggest problems for family businesses, it’s much better to be as open as possible. It’s best to hold discussions in neutral spaces, that way everyone feels as comfortable as possible to air their views and help take the business forward.

  • Get Ahead of the Game and Plan Early

Creating a succession planning ensures that your business is placed in safe hands upon your retirement or should something unexpected happen to you. Starting this process early means that everyone with a stake is fully provided for, the business is stabilised and those in decision making roles are clear of the vision and direction for the business, making eventually for a smoother, less problematic transition.

Putting a structured, legal plan into place can only help the success and prosperity of the business, which really is a no-brainer! Furthermore, early succession planning can help you make considerable tax savings. With more time, you will have more options for tax planning and your business can be structured in a more tax-efficient manner with the help of professionals.

  • Utilise Professional Advice

Your business isn’t a toy that you want to take unnecessary risks with; for that reason using an intermediary and utilising professional advice really can be a wise move. An intermediary can lead the discussion and provide legal input at the necessary times to aid the talks.

Gorvins’ Wills, Trusts and Probate solicitor Tasoula Addison says, “Solicitors and accountants can be invaluable to help focus discussions and ensure any plans being made are viable from a legal or financial point of view. This ensures that time isn’t wasted on plans that are impractical or have unintended tax consequences. An independent person can also take an objective view, and may be able to see a solution to a problem more clearly, simple because they do not have a vested interested in the proposals.”

A major part of succession planning is making sure the legal considerations are covered. Having a valid will is vitally important for all family members in the business, so that the ownership of the business gets passed on to the correct heirs.

Let Gorvins Help

To speak a member of our expert Family Business Team, give us a call on 0343 507 5151. They will be able to provide you with the initial advice you need to get this process started to ensure that your business is around for years and generations to come. You can also email them on familybusinessteam@gorvins.com.