When thinking about succession planning the natural reaction would be someone retiring and looking to transfer their business and assets to an existing staff member or sale to an external buyer. Whereas now we are seeing a variation of this with the transfer of family wealth via inheritance as assets have grown at a rapid rate over the past 20-30 years.
With this added dimension of succession planning in play the importance of developing a strategy of how to move forward and plan is even more important now. By ensuring the transfer of wealth and assets are structured and plan is made of how this should occur can alleviate unnecessary stress during an at times stressful time in your life.
From the more traditional sense of succession planning and business some of the key things to look to implement within your business to prepare for a seamless succession plan.
Career Pathways
To create a more transparent process, the key is letting employees know the potential career paths available to them in the organisation. Keeping this information secret will only end up hurting the company, since employees who understand the future opportunities available to them can begin working to gain the necessary skills to grow into those roles. At the same time, the company can ensure candidates have access to the resources and mentors that can help them prepare them for advanced positions.
Real-time performance feedback
Also integral is to base promotion decisions on actual performance results rather than perceived growth potential or other subjective methods. Using 360-degree feedback on employee performance can ensure that succession planning is based on an objective, legally defensible basis, and it isn’t left to the whims of management or come down to a popularity contest.
Building a brand and social media
The ability to build a brand will not only entice younger employees to want to join the business, but it will also show that the business is strong and a desirable place to start a career which in turn will provide for a strong outcome when that time comes to start your succession planning journey.
The professionals that will benefit from a successful outcome to your succession planning are an accountant, solicitor, and financial planner.
Your accountants can help with providing you with current valuation of business and assets as well as any tax consequences that may arise from the sale of these assets.
Your solicitor can develop a plan on ways to structure your assets and wealth after the sale to provide you with adequate protection of wealth through various structures like Trusts and companies which can overlap with guidance from your accountant on a tax front also.
While your financial planner can bring all of this together and develop a plan for how you can continue to build wealth in retirement and put a strategy together to create intergenerational wealth opportunities for your family.
To ensure you have a plan that encompasses all the skills of the above professionals with the ability for them to communicate and work towards your desired goal will provide you with the best outcome.