Latimer Hinks solicitors, one of Darlington and County Durhams longest established law firms, is giving its seven-point plan for succession planning, as part of the first Family Business Week (November 1-6).
Anne Elliott, Partner at the firm, has set out the action plan to help ensure that the process of identifying a successor or successors and carrying out the process are conducted in a way which ensures the best outcome possible.
Anne said: "In this economic environment, succession planning is more important than ever. Business owners must take the best course of action possible to safeguard their business, their bottom line, cash flow, assets and workforce.
"That might not necessarily mean handing down to a family member. It is a case of making the right choice for the future of the business and all involved, based upon solid, logical reasoning and professional advice, often being dispassionate and putting sentiment aside family members may not necessarily have the right skills to take the business forward.
Annes action points for succession planning are:
Set the targets and objectives you want to achieve from the succession process.
Divide the process up into stages and identify a timescale for each phase from pinpointing who will take over the running of the business to the final handover of control of the company (it might be a five year plan).
Establish if the people you would like to take over the business have the right skill sets and abilities.
Find out if the potential successors are willing to assume the role you have identified for them.
Ask yourself, would it be better for the business for a member of the family to take over or to bring in someone from outside?
Alternatively would the best course of action be to sell the business?
Enlist expert advisers to make sure that any plans are legally watertight, are tax efficient and minimise the potential for challenge by or conflict among family members.
Anne added: "Succession planning is not something to go into lightly, nor is it something that can be ignored. Family Business Week is a good reminder to business owners that a formal, well structured plan should be put in place.
Anne has also been listed in Chambers UK