employees and workers

6 generational succession tips

Do your kids really want to take over your business Generational succession – handing your business across to your kids or family – sounds simple enough. But, many families end up in dispute right at the point when the parents, business, and children are most vulnerable. It’s important that generational succession is managed as closely…

timing your succession

Timing your succession

Transition timeframes and expectations Generational succession is often a process rather than an event, achieved over an extended period of time.  This is quite different to a sale of business where the owner’s active involvement in the business generally ceases shortly after sale. The extended timeframe for the transition requires active management to ensure that there are mutual…

employees and workers

Managing and maintaining family relationships

A key component of generational succession is the ability of the parties involved to separate business issues from family relationships.  Understandably, this can be problematic and requires a significant amount of discipline by the participants. Leadership in this discipline needs to be provided by the exiting generation. Business tensions and differences in view about the…

property

Succession and structure

The need for greater formality and management structure Generational succession often requires a greater level of formality in the management and decision-making process.  This formality should achieve a separation of function between: Management The Board of the company, and Shareholders Often in a small or medium business, roles can merge with no clear dividing lines…

Young businessman standing over a young businesswoman sleeping on a couch --- Image by © Royalty-Free/Corbis

Timing your succession

Transition timeframes and expectations Generational succession is often a process rather than an event, achieved over an extended period of time.  This is quite different to a sale of business where the owner’s active involvement in the business generally ceases shortly after sale. The extended timeframe for the transition requires active management to ensure that there are…

contract

Succession income and control

Succession income needs Ensuring remuneration is on commercial terms In many small and medium businesses, the owners arrange their remuneration from the business to meet their needs rather than being reasonable compensation for the roles undertaken. This can result in the business either paying too much or too little. Under a generational succession there should be an…

exit

Succession and capital transfer

How much money needs to be taken out of the business during transition? What level of capital do the current business owners, generally the parents exiting the business, need to extract from business at the time of the transition?  The higher the level of capital need the greater the pressure that will be placed on…

employees and workers

Succession: Do your kids really want the business?

Capability and willingness of the next generation When it comes to business succession, there needs to be a realistic assessment of whether or not the business can continue successfully after the transition. In some cases, the exiting generation will pursue generational succession either as a means of keeping the business in the family, perpetuating their legacy, or…

business for sale

Thinking of selling your business?

There’s potentially a lot of work to do… One of the questions we often ask our clients is, “When do you plan to sell your business?” We get all sorts of responses, ranging from, “I’ve no intention of selling it” to “We think the kids will take it over, but we’re not sure” to “I’d…