Don’t muck it up!
You have worked hard all your life building a good business and substantial assets. It’s now important to plan and implement that plan for the next stage of your life. It’s absolutely necessary to get this right, as taking no action at all can be very expensive, both in terms of money and family relationships.
What then gets in the way of developing and implementing a good and effective succession plan? The factors for mum and dad are different from their children or successors. Often for dad in particular, there are a number of barriers that can get in the way of developing a truly effective succession plan. This business to date has often been a huge part of his life. It’s who he is. It’s part of his identity and gives him a sense of purpose and pride. He may have some concerns or fears about relinquishing control of the business and doesn’t really believe that action is needed just yet. He may have some concerns about the business capability of his son(s), or daughter and potential successor. He may have genuine fears about how to achieve an equitable wealth distribution between his children without wrecking the business. He may have real concerns about who he is or what he does if he is not heading up this business. Initial feelings of being “thrown on the scrap heap” are not uncommon. Both parents may have some concerns about funding their retirement and protecting the family assets. The possible impact of a failed marriage of one of their children is often a genuine concern but often not discussed for obvious reasons.
From the successors or children’s perspective there can also be some potential barriers. They may be concerned about the level of commitment required to take on the family business or farming enterprise. It is potentially a lifelong commitment, so are they really ready for that? They may feel that they have very different expectations about the outcome of a business transition than their parents. They may be concerned about how it would all be funded and the possible impact on family relationships. Is their ongoing relationship with their siblings likely to be impacted? Will it be possible to reach a viable outcome without having a family “blow-up”? They may also have some fears about their own business skills. Do I really have the experience and skills to carry this business forward successfully? I don’t want to be the one responsible for losing the family heritage.
These are all legitimate fears and concerns, but they are not acceptable excuses for a lack of action. An effective succession plan would identify factors that might potentially get in the way and develop solutions and strategies to deal with them. If you have been successful in building a good business to date, I can almost guarantee that it hasn’t all been plane sailing. Making real progress and achieving success is rarely easy. If it was, everyone would be successful. People who achieve success persist and find ways to overcome barriers and difficulties.
The question of dealing with succession planning is too often “left in the too hard basket” until some event happens that suddenly dictates that the matter is now very urgent. That catalyst might come in the form of a health scare or worse for mum or dad. It might come in the form of a marriage break down or a break down in family relationships. The most successful succession plans are developed and implemented before any of these things become a problem. It is much easier to have meaningful discussions and negotiate satisfactory outcomes while all the key stakeholders are able to meet and communicate effectively.
You have worked too hard for too long to muck it all up now. There is a lot at stake here. Not only are there family assets and businesses, but also family relationships that can be irrevocably damaged when issues like succession planning are not addressed effectively.