Pitfalls to Avoid When Planning for the Succession of Your Business

Business Succession Planning, FBN Trustees, FBNQuest

The process of business succession planning is one that has to be considered seriously in order to avoid complex dynamics and competing priorities that may arise in the future – such as balancing what is best for your company with what is best for your family.

When the many moving pieces of a succession plan are brought into focus, it is easy to see how the process can be unsuccessful in any number of ways.

To be aware of these possible pitfalls is to be prepared for them. Don’t fall into any of these pitfalls no matter what

  • Starting late:
  • “My business is not ready for a succession plan, I want the business to get bigger” – this could be the single most dangerous outlook about your business. Our recommendation is that you begin a business success plan immediately your business breaks even.

  • Creating a succession plan by yourself:
  • Even if you are a professional financial planner, having an institutional third-party like FBN Trustees will bring a fresh and impartial look into your business and ensure both the interests of your business and your family are catered for.

    Training your children to take over your business is just as uncertain as not having a succession plan and may be a more potent recipe for future challenges. There simply won’t be a healthy objective management, and when internal strife begins to stifle the growth of the company, you may not be strong enough to hold onto the company and correct its course.

  • Confusing ownership with management:
  • Business ownership and management are different, but it is not uncommon for individuals to confuse one with the other. Ownership is a composition of the shareholders in the company while management is the composition of people who run the affairs of the company.

    In your succession plan, it is possible to have your children own the shares of the company (and get dividends) while a third-party team of experts manage the day-to-day operations of the business.

    While it is a good idea to let your children run your business when you retire, we recommend you allow an institution like FBN Trustees put a structure in place to guide your children into the management of the business.

    FBN Trustees exists to help make succession planning easier.

    A member of the reputed FBN Holdings Group, we are a team of experts who have in-depth industry knowledge, local awareness and relevant experience, having helped develop wealth transfer plans for families over several decades.

    You can count on us to provide you with bespoke solutions to address your wealth transfer objectives, especially as we realise that no two individuals have exactly the same needs.

    Start planning for the future of your business today to leave a legacy that will last for generations. Contact FBN Trustees to schedule a consultation.

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