Every great leader knows that there is a time to take the helm and provide the direction needed to achieve goals and objectives, whether they are heading a sports team, a school, an emergency response group or a business. Great leaders also know that there will inevitably be a time to let go and hand the reins to someone else. Unfortunately, many business leaders know that theoretically, but do little in a practical sense to make it happen.
Most leaders genuinely want the business to continue to be successful when their tenure is over. Without a structured succession or exit plan in place, however, they are making the transition much harder for their trusted staff. This is particularly so if the new leader comes from outside the business and doesn’t know the culture or the aspirations of the team.
A Succession and Exit Plan is Like a Good Roadmap
Affinity Accounting Plus is a firm of accountants with an active programme in place to encourage their clients to undertake structured Succession and Exit Planning. This process plans the orderly transfer of the business to the new owners who may be strangers or, in a family business, to sons, daughters or other family members. The benefit of doing such an exercise in a structured manner with a financial expert from outside the organisation is that the difficult questions will be asked and answers expected. This often doesn’t happen when the organisation tries to do this in-house.
Business as Usual Gives Confidence, Creates Continuity
A smooth transition means that the business continues to trade and grow with very little in the way of external change that is perceptible to employees, suppliers, business associates and other stakeholders. This creates an impression of stability as the systems and processes that everyone is familiar with continue as usual. It gives confidence to the bankers and suppliers that debts will be met, and any work in progress will be delivered.
The process for developing both succession and exit plans is similar with slight differences in the focus, depending upon the purpose for which they are intended. A succession plan typically is designed to smooth the handover to family members once the owner has decided that s/he wants more leisure time or full retirement. It seeks to preserve the attributes that made the business successful, while allowing the new managers the freedom to innovate.
An exit plan recognises that the most valuable businesses are those that do not require a full time commitment from the leader. Getting the business to this point allows the owner to go on an extended holiday knowing that everything will still function. It is also the best way to set the business up for commercial sale. Knowing where all the legal documentation is located, having a structure that is commercially attractive and protecting the interests of the remaining staff are some of the issues that will be discussed.
Affinity Accounting Plus has assisted many of its clients to make the break from their business in a smooth, orderly fashion. The succession and exit plan becomes a blueprint for what needs to happen, and action plans can then be developed for assigning tasks and responsibilities to others. Visit www.affinityplus.com.au for further explanations and contact details. This process needs professional guidance to ensure that the leader walks away with anticipation and not regret.
