Deciding on a succession plan often falls down the list of things to do in busy growing businesses, but new research suggests it is causing headaches among business owners.
The Close Brothers Asset Management survey revealed that issues around succession planning make up four of the top ten worries keeping family business owners awake at night.
Unsurprisingly, maintaining profitability was top of directors’ concerns, but that was followed closely by management succession planning. The top ten concerns also featured issues including (4) planning for later life (pensions, IHT, transfer of assets and so on), (5) engaging and developing the next generation, and (6) ownership succession and developing responsible future owners.
In many ways this research is encouraging, showing that despite the pressure to deliver short term results, SMEs do have one eye on the long term.
Careful planning needed
Penny Lovell, Head of Private Client Services at Close Brothers Asset Management said: “UK SMEs face a multitude of challenges and family-owned small businesses can have an especially hard time navigating regulation and adapting to changing policy while remaining loyal to their unique set of family values. Beyond that, all this must be done while running a profitable business.
“Succession planning is naturally a significant concern for family businesses and requires careful consideration. Not only must owners consider developing their replacement, and ensure family values are adhered to, they also must plan for their own retirement. Taking advice early and developing a personal financial plan is crucial to alleviating anxiety and meeting long-term goals.”