Can Your Business Survive Without You?
As your accountants and business advisers we aim to get to know you well.
From our viewpoint we often notice when it is all too clear to us that you are too focused on ‘today’ to give any serious thought to the future, and in particular to a future in which you will not play a part.
Whilst it's not something many of us like to think about too much we are all human and mortal, so although the immediate challenges facing you in your business and personal life are undoubtedly important, you should set aside some time to consider what would happen to your family and to your business if you became seriously ill, or were killed or incapacitated in an accident.
It's possible to take out life assurance, and insurance against loss of earnings, but whatever event might trigger your removal from an active role in your business, whether permanent or temporary, you need to consider what steps you should take.
As a business owner, you may have responsibilities to staff too.
Insurance can cover the immediate financial loss, but only some kind of succession plan will create a structure to pass the management and control of your business onto someone else.
Who Should Take Over?
If you're a sole owner of a business, you may want to bring family members into the management team if you want them to be involved in running the business.
If none of your family members are suitable you can consider ways to ensure that key staff members are retained and a path be started for them to take over and run the business, which may secure their own futures as well as those of your family.
If the business is so dependent upon you that it simply couldn't continue without you, you need to start thinking about if there are steps you can take to maximise any value in the business, with the goal to provide capital or an income in the future.
If you are a co-owner of a business, the same basic points apply, though in this case you may have an advantage if your co-owners’ interest is in continuing a successful business in your absence.
An essential element in any business succession plan is that key people involved will need to know in advance what will be expected of them, and be comfortable with it.
Once you have a clear idea of what you would like to do you should talk it through with your family, colleagues and ourselves.