Any business owner knows that one of the keys to long-term success – and, hopefully, growth that continues far into the future – is a robust, carefully thought-out succession plan. Not only should this succession plan stipulate the next generation of ownership and management – hand-picked to lead the business forward – but it should also ensure that everyone is on the same page regarding the way the business is run, and what everyone’s individual roles are.
Plenty of businesses already have succession plans in place, but there are plenty of reasons why a dispute could still arise. Unresolved arguments or a change in circumstances within a business – particularly a family business, where emotions can easily get in the way – can create issues around succession.
Nevertheless, the key to avoiding these disputes is still a strong succession plan – and the key to a strong succession plan is giving yourself plenty of time to make and execute it.
How do you create a strong succession plan?
Whether your business is family-owned and run or not, one of the cornerstones to a strong succession plan is, of course, recognising and investing in key talent – the business’ future leaders who are strong enough to be considered fundamental to its future.
The other cornerstone is expert input from someone who is in the best possible position to ensure that the plan is created without room for error, interpretation, or dispute. A corporate solicitor has an invaluable store of experience and knowledge on their side, which means that they are the best professionals you could turn to for help as you explore the options and determine what your business needs to continue successfully.
What will a corporate solicitor do?
Broadly speaking, a corporate and commercial solicitor will be the expert voice you need to feel sure that your business’ succession plan is truly strong enough to see it through the storm of change, rather than representing nothing more than a formality.
Practically speaking, however, here are some of the things a corporate and commercial solicitor can help with:
- Existing legal agreements, which may determine the value of your business. Doing this yourself is time-consuming, and results in a much higher margin for error.
- As an impartial third party with a wealth of experience on their side, they can be on-hand to discuss arrangements relating to any business partners or family members that may be involved in the discussion.
- They will also be able to take on the job of keeping all your legal papers up to date and in a secure place. Again, this will otherwise represent a major drain on your time – time you need to see to the day-to-day needs of the business – and increase the risk of mistakes or oversights being made.
Besides offering help with the formalities of creating a legal document, corporate and commercial solicitors are also able to help you to distinguish the business’ needs and your personal plans for the future.
Avoiding disputes in the future
As with most things in life, communication is key. Discuss the process, and your thoughts, with family members as you prepare the succession plan, and make sure that they always feel involved. Once a successor has been chosen, take the time to reassure family members that their interests will be safeguarded. Also, make sure you communicate how the successor will be mentored and trained for their future role.
At the same time, make sure that you clarify the roles of all those involved in the business. While some may be responsible for day-to-day management, some may be involved only in the strategic direction. This will help avoid misunderstandings and ensure everybody knows where they stand. Many issues can arise simply as a result of a lack of clarity around expectations and responsibilities.
Once the succession plan has been discussed, make sure it is formalised as soon as possible. Give relevant parties a chance to have their say but know when to bring the discussions to a close and move on knowing that the decision has been made.
Working closely with your corporate solicitor throughout the process – and taking the time to communicate with other parties – will help to avoid disagreements, and prevent succession disputes, therefore saving potential stress, time, and costly legal fees in the long run.