When preparing for a Family Business Succession presentation I was giving recently, there was no way of avoiding the ‘Death’ topic. Isn’t it funny how something we all know is inevitable creates such a feeling of being a taboo subject?
There are plenty of titles for this sort of work such as Estate Planning, Succession Planning and Exit Strategies and, I know it is only semantics but don’t these titles fill us with fear and dread. Holy cow, we are mortal! This means the end, doesn’t end? “I don’t want to face that so let’s procrastinate and things will sort themselves out once I’m gone”. Sound familiar? I began to challenge my own feelings and position on this as I worked through the content of my presentation. So, from now on I am calling it “Future Proofing”.
The concept of Future Proofing is not new, it is something that business owners have struggled with for years. And it would appear that we are very slow learners as a 2012 business survey concluded that only 10% of businesses have a formal succession plan.
So, my presentation had three messages – Make a Start; Understand that there is No Quick Fix; Why do I need to Start?
People often stall on the first one – How do I make a Start? It is easy actually, but you have to ask a difficult question – “What do I want for the rest of my life”. You have to be selfish before you can consider what you want for those around you. People my own age and younger are telling me that we don’t expect an inheritance, we just want mum and dad to be happy.
There is No Quick Fix because we are dealing with people. Somewhere along the line, there is going to be a cost. A hastily hatched plan will have a very real financial and human cost when it turns to custard. A carefully hatched plan may cost more now financially and in time but can prevent the damage that can be caused when the plan is needed.
Finally, you need to make a start because you don’t know when your plan will be needed. It is a sad reflection that the majority of plans are not witnessed by its creator so a plan should be created as soon as you go into business or other life changing events such as a family coming along.
There are several rules for such a plan – put it in writing; communicate it; it must be flexible but clear; it must be a living document. Mostly, it must be actioned.