Ramadan, Lent and business succession – How do you prepare for the future?
Once again, Ramadan and Lent are set to take place simultaneously, meaning that approximately half the world’s population will be engaging in spiritual reflection.
As many people make sacrifices in order to prepare for a life beyond the one they know, business owners should also be aware that they will not be the ones at the helm of their business forever.
It is never too early to think of business succession, but it needs to be managed effectively to ensure that the value is preserved and the culture maintained.
How early can you think about business succession?
It is never too early to think about business succession and it can be effectively incorporated into business strategy from the outset.
This is in the same way that people may engage in spiritual practices to prepare for the afterlife even in their youth, business owners can work to make sure the business is not solely dependent on them.
Some business succession strategies will take more time to prepare than others, but keeping the full scope of options in mind allows you to have control over your exit should you need to move on from the business.
What business succession strategies are there?
Business succession comes down to a decision of who is best positioned to run the business when the time comes for you to leave.
Family succession is a popular choice, but this may require the longest amount of preparation.
To avoid claims of nepotism, you should ensure that whichever family member stands to take over the business is well-positioned to do so.
This means making them comfortable with the business operations and with the culture that you have built.
It should feel like a seamless transition when your business passes to a relative so that employees do not feel unsettled by the change.
When thinking about employees, you may want to pave the way for getting them more involved in the business when you leave.
This is best achieved through either an eventual Management Buyout (MBO) or an Employee Ownership Trust (EOT).
Just because your employees or managers are familiar with your business does not mean that they are well-positioned to run the business.
As such, you should take time to educate them on the intricacies of what is necessary while you are still in charge so that they are ready when you leave.
There is always an option to sell to an external party, but even this requires planning many years before the sale itself.
If you are selling your business, you will want to ensure that you get the most value out of it when the sale is completed.
This means keeping your finances in order and having a robust team ready to keep the business successful for the new owners.
What are the advantages of planning for business succession early?
Planning for business succession early gives you full access to the range of exit strategies available to you.
It is also a good way of enhancing the value of the business and providing security for employees who may be nervous about the time of change.
We can help you to prepare for business succession, regardless of how far off it may actually be.
Your business is an important part of your life and taking time to consider the future can strengthen your current position.
If you are uncertain about the next steps, our expert advice might feel like a prayer getting answered.
Speak to our team to save your business succession plans from future stress.
