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Handing over the reins of a Family Business can be a smooth ride or as painful as falling off a horse! 

It takes careful planning, consideration and execution to ensure a smooth transition, protection and continuation of the Business success.  

Key to that is having a Succession Plan, one that clearly and comprehensively outlines who, what, when and how and should address any potential conflicts or challenges. 

5 Steps for a smooth transition to handover 

1. Early Planning: succession planning includes choosing a suitable successor, training, and preparing the Business for changeover. It's vital that time is taken and effort invested with preparing your successor/s, whether family members or others, to gain the skills and experience needed.  By guiding and mentoring them you are giving them the tools and setting them and the Business up for continued success. 

2. Choosing the ‘right’ Successor: This needs careful thought and consideration. Handing over the reins to a family member, your children purely for sentimental reasons can be fraught with problems. It's important to evaluate their suitability, experience, skills, and dedication. Are they the best fit? As part of this ‘succession’ changeover process it’s essential that everyone concerned, family and employees, are part of the discussions. This can help make informed decisions, provides different perspectives and with clear communication can help avoid misunderstanding. Get everyone on board to take it forward. 

        Example, in a family florist shop, the parents who started and have been the heart and soul of the business, decide it's time to retire and pass it on. Their only child, an adult daughter, is selected. With her time spent in the Business, and with a passion for everything floristry, she is well placed and prepared for managing future operations. With                    mentoring and involving her in decision-making processes they believe it should be a smooth transition. Their legacy remains but the reins will be handed over allowing their daughter to share and install her vision for continued success.  

3. Craft a comprehensive Succession Plan: A well-defined formal Plan provides clear direction and guidance for all concerned and the future of your Business. Craft it carefully establishing governance structures, roles and responsibilities, and identifying who, what, how and when.  Who will takeover, facilitates how and when transition and transfer will occur. As part of this process define your role going forward to establish boundaries and authority to your successor. Know when it's time to step back.

4. Lock-in Legal and Financial Affairs: It’s critical that legal and financial matters are handled correctly. There are many aspects and facets to transferring assets and ownership and managing tax obligations. To ensure all legal requirements are met it's worth seeking the professional assistance of lawyers and accountants.  It’s worth the peace of mind. Blackburn Accounting is your family Business specialist and provide a range of services. 

5. Dealing with Potential Conflict: Proactively addressing potential conflict between family members regarding ‘the handing-over the reins' must be dealt with up front.  Control, inheritance and ownership are matters that can be challenged and if left unresolved can damage both relationships and the Business.  Seek an impartial mediator if needed to guide meetings and discussions. Avoidance is fraught with problems!   

Handing over the reins of a Family Business can be a smooth ride or as painful as falling off a horse! 

By adopting these 5 Steps you can help make a successful transition to the next generation, while you ride off into the sunset to enjoy your well-earned retirement.