Succession Planning: How to Hand Over the Family Business Smoothly
There comes a time in every family business when the conversation can no longer be put off – who’s taking over the reins?
It’s not always an easy discussion. Handing over the family business can feel like giving away your life’s work, while the next generation are often keen to make their mark (and perhaps change a few things). But a well-thought-out succession plan can make all the difference between a smooth transition and years of awkward Sunday lunches.
At Navigate, we work closely with family-run businesses, and if there’s one thing we’ve learned, it’s that no two succession plans are ever the same. But there are a few common-sense steps that can help make the process less daunting – and much less emotional.
Start the conversation early
Succession isn’t just about who’s taking over – it’s about when, how, and on what terms. Starting the conversation early gives everyone time to get used to the idea and plan properly. It also gives you the breathing space to iron out any differences before they turn into bigger problems.
And if you’re worried about it being awkward – you’re right, it might be. But it’ll be a lot more awkward if you leave it until the last minute.
Be clear about roles and expectations
It’s tempting to assume everyone knows what’s going to happen – but assumptions and family businesses rarely mix well. Clear, honest discussions about roles, responsibilities, and expectations help avoid misunderstandings later.
Will the next generation take full control straightaway? Is there a handover period? Will you still be involved behind the scenes for a while? These are questions better answered now than in a crisis later.
Get the legal and financial side sorted
This is where things can get tricky without proper advice. Business valuations, shareholder agreements, tax planning – they all play a big part in making sure the handover is fair and financially sound. A rushed plan could leave you with unexpected tax bills or legal wrangles nobody wants.
It’s not just about minimising tax (although that’s certainly part of it). It’s about protecting the future of the business and the family relationships that go with it.
Think about the ‘what ifs’
Succession planning isn’t just about the best-case scenario where everything goes smoothly. It’s wise to consider the what ifs too – what if the next generation changes their mind? What if someone wants out down the line? Having a plan for the less-than-perfect situations can save a lot of heartache later.
A good plan isn’t just a nice document for the bottom drawer – it’s a roadmap that protects the business, the family, and everything you’ve built.
Don’t try to do it all yourself
You’re an expert at running your business – but succession planning brings a different kind of challenge. Having an outside voice (one that knows a thing or two about family-run businesses) can be invaluable.
Like we mentioned, we specialise in helping small-medium and family-run businesses with these exact conversations. We can help you put a practical, sensible plan in place – one that keeps the business thriving, the family happy, and the Sunday lunches civil. Ready to start the conversation? We’re here when you are. Call us on 01709 589 439 or book a call with our team.
