Communication is vital to success in planning your exit - Succession Plus

Free Webinar – Maximise the Value of Your Business – Register Now

Communication is vital to success in planning your exit

Succession and Exit

Communication is vital to success in planning your exit

By , May 21, 2018
rawpixel-659501-unsplash-1

As we work through succession plans with clients, we often see roadblocks or at least stumbling blocks appear – and often not where you would expect. For example, once your business strategy is in place, the business model, marketing, funding’s success largely depends on relationships. That is to say relationships with suppliers, customers, staff and other stakeholders.

Relationships require maintaining and energising

Central to this is the managing of expectations. People come to expect certain behaviours in certain situations and are generally averse to sudden change.

Along comes a new manager or owner, perhaps from a different generation with different values beliefs, behaviours and norms. The possibility of uncertainty and suspicion entering the picture is relatively high during business transition. This can destabilise your business and cost money if not handled correctly.

Communication is the key

In any Succession Plan, an important part is the consideration of who will be affected by changes that are happening, how they will be affected and how to deal with this. Different strategies will be needed for different people and areas.

One of the clients we worked with had a very successful business in the textiles area – started by his grandfather, now run by the father (in his seventies) and was in the process of being handed over to the son (who had worked in the business all his life). His son took over and didn’t have (or make) time to sit down with staff and chat about what was going on. He did however make sure he emailed everyone and told them his door was always open but unfortunately, staff were not used to this and so no-one walked thru the door. This raised all the little issues his dad used to handle easily. The father had a habit of coming into the office and sitting on each person’s desk and “having a chat” – about the weekend, the kids, sports etc. In the process, staff inevitably discussed any business issues they were having with him in a casual way, but he knew everything that was going on in the business and was able to handle small problems quickly and easily.

The son’s approach is not necessarily wrong, but the staff needed transitioning from one approach to another.

"Succession planning is a lot more than a financial transaction."

Click to Tweet
Craig West

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.