PASSING THEBATON

Asabusiness owner youhave probably spent countless hours writing business plans overthe years to help keep your business thriving. As aresult, youmay have awell-developed business plan in place but have yougone far enough in considering what happens to your business after youretireorifthe unexpected should happen?

Fewconsider succession planning earlier than they need to,whether that be selling thebusiness to acompetitor passing it on to family members or to one or two keyemployees, or even creating an employeeshareownership scheme, depending on thesizeofthe company.

Plans In Place

Whatever thefutureholds, it’simportant to have aclear plan in place so youknowyour business is in good hands when thetimecomes.

We knowitcan be hardtoimagine someone else running your business after you’ve nurtured it and watched it grow,but creating asuccession plan helps youlookafter its future.

Some of thebenefits of succession planning include:

•putting theright people in charge

•looking forwardtoretirement

•preparing forthe unexpected

•peace of mind that your business will continue

The promotional merchandise sector has its fair shareofbusinesses that have been around for20, 30 or even 50 years or more -businesses that have been builtonlongterm customer and supplier relationships withacultureand identitythatreinforces whytheyhavebeenaround forsolong.

Knowyour Options

Employees who have helped theowner(s) makethe businessa success storyare stakeholders withavested interest in thefuture wellbeing having possibly committed agreat deal of theirown emotional capital to the cause. Fewowners mayseriously consider having meaningful internal discussions about their plans, even though they arethe very ones who really knowhow thebusiness ticks. The normal scenario is to offer to seek an external buyer,someone withthe financial means to do adeal. Understandably, suchpotential buyers maynot have the same motivations as thoseofemployees; chiefamongst them beingtobolton extrasales to theircurrent business withaviewtoaneventual sale with thebenefit of acombined turnover.

Consider The Staff

So whyshould an owner start thesuccession planning process by first considering selling to one or moreemployees?

The keymotivation would be to leave a legacy, to allowthe business to continue to flourish, maintain its identity, its cultureand continued employment forexisting staff.If this canbemaintained and agreeable sales termsnegotiated, then surely this must be thebestoutcome forall concerned?

Such atransition would allowthe existing owner(s) to scale back on theirday-to-day commitments during thebuyout period, thus allowing theowner(s) to makethe transition to retirement less of acliff edge experience. Fortunately,todaythereare various avenues available to employees to meet thefinancial requirements of buying thebusiness and owners should at least give them theopportunitytodoso.

Paul Green is managing director of theGalpeg Networkwhichprovides back office solutions forpromotional merchandise businesses