Succession planning
Several topics look at what happens when the owner wants to pass the business on to the next generation in the family, including choosing a successor and dealing with the conflict that can arise between family members, and the issues surrounding the appointment of a successor from outside the family. The owner maydecide to sell the business, and we look at the reasons for doing this, and ways of planning and managing the process. Finally, we cover aspects of financial and tax planning.
The materials
The materials are available as a series of downloads - click on the appropriate link(s) below:
When you have worked through this topic you should be able to:
• identify reasons why the owner of a family business might choose to leave the business
• list the various options open to family business owners to end their involvement.
When you have worked through this topic you should be able to:
• interpret current research into business owners’ preferred exit plans
• explore reasons for business owners preferring certain exit routes over others.
When you have worked through this topic you should be able to:
• describe why planning for succession is vital to the family business
• assess the role and importance of family involvement and timing in succession planning.
Topic 5: Choosing a successor
When you have worked through this topic you should be able to:
• describe who should be involved in the process of choosing a successor
• list criteria for choosing a successor within the family and explain the need to be objective.
When you have worked through this topic you should be able to:
• assess the importance and role of training for the chosen family successor
• describe the importance of communication in the process
• summarise the responsibilities of the owner in the process.
When you have worked through this topic you should be able to:
• describe the main issues involved in seeking a successor outside the family
• outline the role of caretaker managers.
When you have worked through this topic you should be able to:
• summarise the various types of sale that family business owners might consider
• describe the benefits and drawbacks of the various options.
When you have worked through this topic you should be able to:
• outline the importance of taking a systematic approach to planning the sale
• describe the issues involved in finding a buyer and valuing the business.
When you have worked through this topic you should be able to:
• understand the importance of minimising tax liabilities to protect personal and business wealth
• outline steps for minimising inheritance tax
• explain the need for careful planning and, above all, professional advice.
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