Many factors determine whether a business succession plan is necessary and successful. Sometimes the logical and easy choice will be to simply sell the business. However, many owners prefer the thought of their businesses continuing on even after they’re gone.
Choosing a successor can be as easy as appointing a family member or assistant to take the owner’s place. However, there may be several partners or family members from which the owner will have to choose, each with various strengths and weaknesses to be weighed and evaluated. In this case, lasting resentment by some or all of those not chosen may result, no matter what choice is ultimately made. Partners who do not need or want a successor may simply sell their portion of the business to their partners in a buy-sell agreement.
When business owners decide to cash out (or death makes the decision for them), the first task is establishing a set pound/dollar value for the business, or their share of it.
An alternative approach is the process of identifying and developing internal people with the potential to fill key business leadership positions in the company. This succession planning approach increases the availability of experienced and capable employees that are prepared to assume these roles as they become available.
Can you count how many times a CEO has retired or otherwise moved on and confidence and its shares price suffers. How many times have you seen a coach move to another team and the fortunes of his former team take a nose dive. The cost is often huge. Without a deliberate strategy in place, you are simply asking for trouble.
Management Consultants London (MCL) will attempt to work with all the stakeholders to agree a smooth transition plan.