Business succession, 7 practical tips!

Business succession is a complex process that many business owners face. It is the transfer of a business from one generation to another, or from one owner to another. This can be desirable for a variety of reasons. For example: retirement, illness or death of the current owner. Business succession is an important topic for business owners, but it can also be a challenging process. What should you pay attention to when it comes to business succession? In this article, we take a closer look at this question.

First, it is important to realize that business succession is not just about transferring ownership and management of a business. It is also about creating continuity in the business and ensuring that your business continues to grow and prosper under the new leadership.

When you want to transfer your business to someone else, there are several things to consider. Below we discuss some important points that you should not forget during this process:

1. Start on time

Business succession is not a process you complete in a few weeks or months. It often takes years of planning and preparation before everything is ready for the actual transfer. Therefore, start thinking early about who might take over your business and what the new owner needs to be successful.

2. Establish a succession plan

Creating a succession plan is essential to successfully transferring your business. This plan should contain all the information the new owner needs to continue the business. This includes information about customers, suppliers, financial data and future plans.

3. Find the right person

Choosing a suitable successor is crucial to the success of the transfer. You want to find someone who is not only passionate about the business, but also someone who has the necessary skills and experience to lead it. A critical eye in this regard is essential. A family member or employee is not always a suitable candidate as a business successor.

4. Ensure good communication

Good communication between all parties involved is crucial during the business succession process. You must be open to questions and feedback from potential successors, and there must be clarity about when which steps will be taken in the process. Also, involve a business successor in the business succession process in a timely manner so that the successor also knows why certain choices are being made.

5. Leverage legal and financial expertise

Business succession can be very complex and can involve many legal aspects. Therefore, be sure to seek expert advice from an attorney or notary who specializes in these matters. We can help prepare contracts, deeds and other documentation needed during the transfer.

There are also all kinds of financial aspects involved in a business succession. Among other things, you must have the value of the business determined. If you gift or inherit the company, the business succession facility may be applicable. Have a specialist assess this in good time. This facility has been part of a political discussion for several years. The question every year is whether the regulation will be maintained in the same way or whether it will be scaled down or even abolished altogether.

6. Avoid pitfalls

There are several potential pitfalls in business succession. For example, the new owner may not have the right skills and experience to successfully continue the business. There may also be a lack of clarity about the value of the business or there may be arguments between family members involved in the succession. So make good agreements about this, involve all stakeholders (including, for example, the children who are not continuing the business) and record considerations and agreements well so that you can fall back on them if necessary.

7. Plan ahead

Business succession is a process that requires a lot of time, energy and resources. Therefore, it is important to plan ahead and consider all possible scenarios. Make sure you have a plan for if you die unexpectedly or if you want to retire earlier than planned.