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Services Generation Succession

Generation Succession

Immediate exit strategies are designed to combat what is hoped will never happen. Generation succession strategies are designed to enhance a process that is expected and indeed, needed, to be successfully completed.

The key reason to set up generation succession guidelines is to identify the successors to current owners within 4 to 5 years of a planned changeover. The issues hear are numerous:

  1. A business without a buyer has no value at all.
  2. When ready to retire and with no buyer a fire-sale environment can be generated with a catastrophic loss of capital resulting
  3. The viability of the business is then a mute point as it will usually be forced to accept piecemeal offers.

The answers are to recognise and plan for the following:

  • Locate a internal or external successor with the skills and drivegensuccession
  • Do this at least 3 years out, more if possible
  • Put exit strategy planning in place in case the first choice does not work out
  • Plan for value of share holding to be increased according to KPIs
  • Assist them to build up equity
  • Aim for at least a 15/20% holding by the time comes to retire or resign
  • Much less than this does not give security of ongoing capital payment from the business over the next few years

Working up a generation succession plan with my consultancy can save your retirement plan.

Planning to sell without planning how and to whom is a final throw of a gamblers dice.