To make a plan successful, the right players need to be involved. This includes a variety of stakeholders from both inside and outside the business. Each one will play a critical role in helping to ensure a smooth transition.
Your key players include:
- Family. Whether you are handing the company on to a family member, they should be involved in the business as early as possible so they are well groomed to take over. However, even when there is no plan for a family member to take over, it is still important to include family in the decisions, as the business will be a big part of their lives and impact them too.
- Management. Whether you management team is made up of one person or a team of ten, your management team are the backbone of your company. They know the processes and systems, they know your team members, they know how to make sure the company continues to function efficiently.
- Staff. Although your entire team will not need to be involved in the planning stages, it is important to recognize the importance of keeping your staff informed of changes to the company, how it will affect them, and how you will ease the transition.
- Banks and Financers. While these players will not make decisions on your businesses direction, they have a significant say on the funding needed to run the business and pay for operations. Banks often offer succession planning advice, including financing options for any family or management planning of purchasing the business from you. They will also be able to provide you with current industry and economic information, which will contribute to any financial decisions.
- Accountants. Your accountant will be an integral part of assessing how much your business is worth. They will also make you aware of any tax implications or ways to reduce taxation if you’re selling your business.
- Lawyers. One of the most important roles in succession planning will be played by your lawyer. They will draft any purchase or sale agreements, prepare wills, help with power of attorney, set up trusts, and offer advice on anything to do with tax and the restructuring of your business.
- Business Brokers. Business brokers are like realtors, their job is to find a buyer for you and help you prepare your business for sale. They will help value your business, and over advice to make it look more attractive to buyers.
- Facilitators. You may want to employ a Facilitator to help guide the process. They will help define your goals, discuss the potential hurdles and resource needs, identify key risks and offer alternatives. If you are keeping the business in the family, the Canadian Association of Family Enterprises offer a great number of resources and events.
- You. Possibly the most important person in this process is you. You will need to make yourself available to work on the plan, speak to the key players and provide the information they need to put the plan together. If you’re not invested in the plan and planning process it will not succeed.
Although this list is not exhaustive of all the players and groups that you may need in your own businesses succession plan, the key thing to remember is to keep the communication channels open and honest with all players. Keep channels of communication open to those involved, so they understand the process and why it’s important to you and the organization.
For more information on how to create a succession plan and how to place a value on your business, check out our Succession Planning for Business and What’s Your Business Worth? Business Valuation seminars presented by Paul Savage of Pacific Custom Brokers.