With the passing of Her Majesty Queen Elizabeth II, there has been much discussion about how she will be remembered, her legacy and succession of the Crown.
“All good men and women must take responsibility to create legacies that will take the
next generation to a level we could only imagine.” — Jim Rohn
Now, most people don’t need to worry about the succession of royal duties, but leaving a legacy for your family and future generations is something that should be considered, especially if you are a business owner.
While the succession of the crown is clear, just how clear is your business succession plan? A business succession plan can vary greatly depending on the ownership, size and structure of the business. Succession plans can cover more than the event of when you pass away, they can include strategies for retirement or illness.
When developing your business succession, it is important to include all key stakeholders. This may include key personnel and family members. Ensure that you have open and honest discussions with all of those involved to allow for communication of their wishes.
It is important to consider the skills and resources that will be lost with personnel exiting the business and how will these be replaced. Do you need to start developing the skills of others currently within the business, or would you need to employ additional staff? Ensure that you consider the costs to fund this.
With you or other key stakeholders exiting the business, what would the impact be on the business value? If you are relying on your business to provide for your family or fund your retirement would your business maintain its value without you in it? Or should you be considering other options to assist in providing for your family or retirement funding?
Finally, to ensure your legacy can carry on and your wishes are carried out, protect your family and yourself by seeking qualified legal advice and having the correct legal documents in place. On the financial front, speak with your trusted financial adviser to ensure your business succession is accounted for in your financial plan.
Katrina Dhu (GradDipFinPlan, DFS(FP), ADFS[FP]) is a representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.
Note: This material is provided for information only. No account has been taken of the objectives, financial situation or needs of any particular person or entity. Accordingly, to the extent that this material may constitute general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. This is not an offer or recommendation to buy or sell securities or other financial products, nor a solicitation for deposits or other business, whether directly or indirectly.