HomeInsightsBlogOpen and honest communication is critical for succession planning

Insights

Blog // 17/08/2016

Open and honest communication is critical for succession planning

Good business succession planning is based on strong communication

The foundations to good business succession planning

Business Structure

By establishing the right structure for the business at the outset, business owners have an opportunity to secure the best value for family members and other senior-level managers while protecting the long-term interests of the company. Introducing an employee share scheme, such as an Enterprise Management Incentive (EMI) scheme, for example, can help to reward key members of staff and allows the business owner to leave a positive and motivating legacy for the next generation.

Business Planning

With careful planning, alphabet share schemes can also be a useful means of distinguishing between family members and non-family members. For example, depending on which class of shares they hold, individuals may have defined voting rights or other specific rights related to capital or income.

In times of uncertainty business owners may feel that it is necessary to stay involved in the business for longer in order to support the next generation. If this is care then it is important that other family members and shareholders understand how this could affect them. For example, as the Brexit uncertainty is expected to last for some time, it may be necessary to put in place a number of succession scenarios depending on trading performance.

Leadership and decision making

Many family businesses have strong business leaders at the helm who are able to make decisions quickly. This can benefit the business as it will be well placed to take advantage of any opportunities that arise. However, if succession plans are put on hold, business owners must ensure that family members are properly rewarded and incentivised to keep bringing fresh ideas to the table and drive future growth.

Dave Gosling - Menzies Accountant

In this way, family businesses can have the best of both worlds – the stability that comes from an older generation and an established brand that has experience of navigating times of uncertainty and the energy and creativity of younger family members.

For further information please contact Dave Gosling at dgosling@menzies.co.uk or call 01489 566703.

Print Friendly, PDF & Email


RELATED CONTENT
  • 2018 EU reclaims: Change of filing deadline in the event of a no deal Brexit

    Carol Hallam – VAT Manager Urgent action is required if you incur EU VAT in the member states and recover the VAT through the online EU reclaim portal. HMRC have advised that in the event of a no deal Brexit, the 2018 EU VAT claim will need to be submitted by 29 March 2019 when […]

    Print Friendly, PDF & Email
    READ MORE >
  • How competitive is the UK’s tax system in relation to others?

    Although the government is proud of the UK’s position with its most competitive tax system in the G20, initiatives such as the BEPS (Base Erosion and Profit Shifting) project, which has already been adopted by 124 countries, making it harder to stand out from the crowd. With tax becoming an increasingly important global topic, the […]

    Print Friendly, PDF & Email
    READ MORE >
  • Is your profit data misleading you? Part 1 – valuable insight

    Tim Dunn – Strategic Advisory Partner Developing good products and services is important, but it is not everything – commercially there are a number of pieces of the jigsaw that need to come together if a business is to achieve its potential and fulfil the owner’s dreams. Ultimately, profitability must be a key consideration – […]

    Print Friendly, PDF & Email
    READ MORE >