Family Business Succession Planning: Lessons Learned and Urgent Need

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BUSINESS Noticias

Succession Planning,Family Business,Business Transitions

This article highlights the importance of succession planning in family businesses, using the example of Michael Scrivens and his insurance company. It contrasts his proactive approach with the statistics showing that most business owners haven't yet developed a plan. The article emphasizes the potential consequences of neglecting succession planning, including financial losses and family conflict.

Michael Scrivens always knew that the family business was a good opportunity for his kids. It’s passed through his family for four generations – all the way back to the 1930s. Witnessing multiple transitions in their insurance business has given him perspective on passing the torch.

One thing he knew right away: When the kids finish university, they will need to have three to five years’ experience doing something else, so they can bring some experience and a different perspective to the table should they decide to eventually get into the family business. But the biggest lesson he’s learned is that a successful business transition doesn’t start two or five years in advance. It should be 10 to 15 years ahead of the game. “ The newer generation has to be involved in the business-planning exercise; when you sit down and do a business plan they have to be involved and get the nuances of how things are run. Mr. Scrivens’s story is the exception rather than the rule. According to a new HSBC report released last month, around two-thirds of business owners have yet to create a succession or exit plan. The survey, which was conducted by Ipsos and included about 1,800 entrepreneurs across 10 markets, found that many business owners avoided succession planning because it felt daunting or time-consuming. But avoiding it can be costly – the drama that arises from handing over a family business isn’t limited to fictional multinational enterprises on TV shows such as. As more than 60 per cent of family enterprises are set to change ownership in the next 10 years, according to data from Family Enterprise Canada, they’ll need to develop a succession plan well in advance to maximize financial returns while minimizing family drama

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