Succession Planning

One of the most important factors that
contribute to the survival and continuation of a family business is a
well-thought-out succession plan. We know that those who are running a family business
today will not be able to continue in their role forever. If the family wants
the business to survive for many decades into the future, the time to start
planning for eventual succession is today, and not after few years when the
current team is near retirement and the next generation has lost its prime
years.

 Family business succession requires active
collaboration from every family member who is currently involved in running the
business. It cannot be decided in isolation by a few senior family members in a
closed-door meeting. The process should call for participation from everyone
and make them aware of the plan. The goal is for the family business to
succeed, and the most effective way to guarantee success is to embrace the
succession process as something that will take time and dedication.
“Succession is about the continued economic success of the business, and
not about who will have which designation and which office.”
 

 Plan Ahead

Transferring control and roles within a
family business is a complex process. In a utopian world, the present leaders
should come to terms with the fact that they are near retirement. They may
publicly say that they are ready to hand over the reins to the next generation
but giving up control and letting go can be a difficult transition. Therefore,
planning for eventual business succession is essential.

 Transition is a time-consuming process

The best family business succession plan is
implemented over many years.  The
successors need to get inducted and learn their eventual roles well ahead of
the actual transition. It needs time for training and knowledge gathering. The
successors should work in other business at least for a few years. An outside
mentor or a senior professional board member can help teach accountability and
responsibility to prepare the family business successors for the management
role that will eventually be passed to them.

 

Develop a Timetable

The successors need to understand the
financial aspects of running a family business before being put in charge.
Otherwise, this weakness can lead to the demise of a family business. This is
one of the reasons that makes family business succession planning important.
Hence a written plan with a timetable that marks when key events need to be
developed, which helps measure benchmarks. A family member needs to be assigned
for making sure the business adheres to the plan.

 

Does Your Family Business Need Help?

With extensive hands-on experience in
assisting family businesses, we understand the challenges families face as they
work together to build a thriving family business generation after generation.
Through orientation programs, one to one and group meetings, workshops, public
talks, mentoring, coaching, family retreats, and private family business
consulting services, we help family business owners chart their way through
family business issues of all shapes and sizes.

To know how our services can help your family business reach its potential –


+9198 2001 4999

+9122 7961 4770
+9122 2541 1214

sandesh@mestry.in

Get In Touch

Sandesh Vasant Mestry
Family Business Consultant and Mentor
101, New Chandralok CHS, Ground Floor, Near, Veer Savarkar Marg, Tembhi Naka,
Thane West, Maharashtra 400601