PHASE 1

Determine the exit timing and requirements of key stakeholders. In the phase, it is important to start with the owner by going through intensive interview of succession needs. It is important to take quality time to prepare a strategy to maximise your succession plan and its benefits for you.

Family members will be included as a group or as individuals to resolve possible conflicting issues with regard to the plan. In some cases, it would be necessary to include employees or key managers to be included to assist in the transition of ownership.

Consider an independent third party taking the role of manager of the succession process, one who would co-ordinate all advisers, gather the necessary information and ensure key issues are addressed in the succession plan.  

PHASE 2

Prepare the Business for a smooth succession. After determining the requirements for the succession plan, the owner needs to work on these important issues:

• Assessment of the current position of the business (e.g. financial, structural, & cultural);
  
  
• Identification of the key areas in need of development (e.g. restructuring, refocusing, & training), and
  
  
• Stakeholders’ agreement on a priority for action steps in preparing the business for the succession.
   

PHASE 3

Research and consider all viable succession options, using agreed-upon stakeholder requirements, e.g. owner, family, team members, and considering other advisers input, research all options, and determine the most viable ones.  

PHASE 4

Select the preferred options and develop an implementation plan.

Options will need to be determined that allow you to weigh each plan option against your priorities. Once you agree on your succession planning options, it is necessary to prepare a formal written succession plan and incorporate it into your overall strategic business plan.

The final written succession plan should clearly communicate everyone’s role going forward. The plan acts as a “contract” between stakeholders…..a promise to support the plan. After implementing the plan, it is necessary to review it periodically to ensure it is relevant for everyone.

Your business will face an ownership transition one day. The time to plan is now. By failing to plan, you could lose the opportunity to transfer successfully your major investment. There are many options and issues to consider. One key to successful planning is to make sure that when the transition occurs, it is sensitive and structured, and it results in the preservation of as much wealth as possible.

NEED MORE INFORMATION

Behan Legal assists and advises on these important issues only in conference. For an appointment, call 03 9646 0344.