You’ve built a business you’re proud of. You’ve created a network of shareholders, earned a great reputation, and enjoyed watching your company grow. Now, your hard work can look after you and your loved ones.
So what are the first steps to protecting your wealth? Our market experts have compiled the top five tips for effective succession planning below.
1. Prepare A Plan
Every business, whether large of small, depends on the foundations of a well thought out plan to operate efficiently. The same goes when you consider a succession plan, and should include:
- Your personal and business goals
- Your financial and aspirational goals for your future and your business
- What should happen to your business if you step back
- A reasonable timeline.
Most business exits can take up to five years to implement, so it may seem strange creating a plan for something that seems well off in the future, however the more you plan now, the less you need to consider or change as the time approaches.
It’s also important to consider what you would want to happen if something unexpected were to happen, and you were no longer able to control your business. You are the person who understands your business the best, so making sure your instructions are written down gives you the reassurance that your business will be guided in the right direction, should anything happen.
2. Protect Your Wealth Professionally
Continuing from preparing a plan, the next crucial step is ensuring that your business is protected from a legal standpoint. Will your business and personal assets go to who you want them to go to? Have you appointed a Lasting Power of Attorney should something happen to you? And are your business governance documents in place and up to date?
These are all things to consider when protecting your business and wealth, particularly as it passes on to the next generation. Wills and Lasting Powers of Attorney (LPA) are often used as personal wealth protections, but are you aware that you can create a specific business LPA? Appointing someone to take control, in the event that you’re unable to yourself, allows you to maximise your legacy, and operate a business that reflects your wishes.
It's important to note when taking professional advice to make sure your advisors are talking together, plans are adequately aligned and that they work effectively together.
3. Share Your Plans
Our number one piece of advice when creating a plan is to share with the people who will likely be affected by it. As with any business plan, sharing any arrangements with the key stakeholders will set the groundwork earlier, leading to a smoother transition when it’s implemented.
This doesn’t just stop at business partners either, sharing with family members and anyone involved ensures that there’s no surprises or shocks later down the line. It may not always be an easy subject to broach with loved ones, but having the conversations earlier rather than later can avoid disputes that can be negotiated or dealt with whilst you’re still there.
4. Review Regularly
Our next recommendation is something that is often overlooked. As your business and family grows, aspirations and plans can also change over time. The most effective plans are those that are flexible, so checking in and reviewing your documentation every few years is highly recommended.
At a minimum we would recommend reviewing your plan every five years to update any changes. Whilst doing this, don’t just look at changes within your family or business, make sure your business governance is in line with current laws, this will avoid any nasty surprises in the future.
5. Get Expert Advice
Once you’ve got a good idea of your business’ direction, goals, and financial situation, you’re ready to talk with one of our experts.
We’ll take the time to get to know you and what drives your need for legal advice. You can then benefit from our expertise of supporting business owners and explaining the options that are available to support you.
Our friendly and approachable team can offer support and clear guidance, advising you on what action to take to ensure your wishes are followed and your best interests are looked after. We're one of the UK’s leading law firms, and our specialist teams located across multiple offices has extensive experience with legacy planning and supporting your business.
Contact Us Today
Contact us today for help and advice on planning for retirement. You can call us on 0808 250 7258 or contact us online.
Supporting You And Your Business
We want to support you to achieve your ambitions, whether in your business or personal life. Please visit Supporting You And Your Business for more ways you can plan for the future.