Building Your Business
PLATO Businesses Reflect on the Value of Structuring Succession

16 March 2018

PLATO companies recently undertook a succession planning seminar in Newry held in association with PKF-FPM and with Newry Family Business Best Practice Exemplar, FM Environmental. The event led by Michael Farrell and Michelle Hawkins of PKF-FPM, were provided with key contacts and contexts to planning succession.

Image result for passing the baton

Some takeaways were:-

-  Succession as a process not an event

-  Family versus non-family enterprises perform differently and  family businesses often perform better during recessionary times as they are able to consolidate better

-  Family business succession is not an exercise it required funding, essentially the company is funding the team to that needs to be in place to implement the formal business strategy.

-  Some Important factors in operating a successful business are leadership and shared responsibility, customers and a company commitment to innovation.

-  Reward and remuneration are critical elements to staff performance whether family or not – this systems needs to be fair and transparent

-  The lifecycle of the business owner is generally shorter than the lifecycle of a family business so the founder should not defer the decision of succession to the next generation - should actively plan and if you don’t control events they will control you!

-   Shareholders agreements are a basic essential for companies planning succession

-   For the implementation piece of succession planning to work essential ingredients are effective succession funding and tax planning, ensure structures are fit for succession and ensure strong communication channels open.

 

 

Michael Farrell, indicated there was merit in communicating succession plans with the appropriate people whilst also debunking some myths:-

-  The eldest  child should be MD of the company – may not be best, have skills, it is not like how it used to happen in agriculture with land succession

-   All children whether passive or active should have shares – remuneration in salaries is often preferred

-   We can do it ourselves – don’t under-estimate the role of a succession facilitator

-   It is an organic process - establish critical steps e.g. training process etc. or succession of new leader/team will not happen

-   Founder can leave whenever - Decide on retirement date and stick to it

 

Eamon Fitzpatrick of FM Environmental facilitated the Q&A session providing learned examples of this own personal journey to succession of the company citing, “He was put out to grass a long time ago now and the company is thriving beyond his wildest imagination”. Eamon talked about the importance of good staff on board in any company to drive the company’s global objectives.

 

Dr Cecilia Hegarty circulated a number of tools useful for all businesses thinking of succession situations on:-

Tips for Effective Communication

Tips to consider when framing a Family Constitution

The Options Questionnaire – 5 keys questions to ask yourself

Questions for the Current Founder/Owner

The Hardline Questionnaire – reflective questionnaire on asking you some tough questions covering some tax/legal implications

Lifecycle of a business owner – is not the same as lifecycle of business

A Few Simples Rules for Smooth Family Functioning

Systematic Conflict Resolution Approach

For further queries email: Cecilia@platoebr.com

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