More than 40% of marriages in the UK end in divorce, according to the Office for National Statistics and with many of those divorcees remarrying, ‘blended families’ – bringing together each parent, as well as children from previous relationships – are not uncommon.
As this type of family structure has increased, so too have blended family businesses, with members of the second family invited to take up senior positions within the company. There are many high profile examples of such businesses, for example Rupert Murdoch’s News Corporation.
Succession planning can be difficult at the best of times, but with the added complexity of a blended family, it can be even more problematic. Nonetheless, the fundamentals of good succession planning still apply.
Getting a plan in place as early as possible is always a good move. Try to identify who it is you want to take over when you step down. It may be that restructuring the business, so your responsibilities are picked up by more than one member of the family, is the best move both politically and for the good of the business. It may be useful here to determine separate areas of responsibility for each successor, and have in place formal dispute resolution procedures in case of any issues.
Be sure to speak to them about their own ambitions and how they see their role in the business developing after you step down. Don’t just assume they will want a position of responsibility.
As an alternative, you may feel that the best option for the future of the business is to recruit externally. For example, if you feel that nominating a family successor or successors will cause conflict within the business. You may even want to consider other exit options such as a trade sale or management buy out.
Hands on training.
Once you have worked out who will be taking over, you need to get them ready for the role. That doesn’t just mean the day-to-day tasks of the job, but also the skills they need in order to run the actual business. Will they need specialist training or additional qualifications?
It is important to communicate your succession plan to everyone in the business. You’ll need to be able to explain why you have chosen them to succeed you – this can be particularly tricky in a family business, so be prepared. Setting out a clear timetable for the change is a good idea too.
What will you do next?
Stepping down from a business is not easy – it can be very difficult to let go. This process will be made easier if you clearly determine any future role you will have in the business. If you want to truly distance yourself, then you should consider a family management buyout, where the succeeding family members buyout any shareholding you may have.
No matter what your family make-up, it’s crucial to plan for the future and establish exactly what you want to happen with your business, your home or your assets should you pass away. For advice on making a will contact Talking Wills & Trusts Ltd. today on 01925 859623 or email us at firstname.lastname@example.org.