For many business owners, succession planning used to mean selecting which child would follow them into the family business. When a will was made, that was the succession planning dealt with. If there was no family to succeed, then the fall back was a management buy-out and preparing the senior management team to take over the business.
While these may still be very important aspects of planning for succession, they only form part of good succession planning. Proper planning needs a long-term approach and, indeed, starts as soon as the idea for the business is born. Choosing the correct entity structure, financing arrangements and incentive packages for key employees are all essential parts of creating a legacy that can be passed on to the next generation.
The vast majority of business owners do not have a plan for succession. Most will have a sense of who they want to succeed but failing to discuss this and make a formal plan all too often results in value lost, poorly planned sales and family disputes.
All of this can be avoided with a proper plan.
MKB Law has worked with the owners of large and small businesses, across many sectors and with complicated families to develop those plans.