The Institute of Directors (IOD) has written a very interesting article, interviewing four owners of successful businesses who appreciate the value and importance of succession planning to safeguard their family’s firm. Click here to read to the interviews with inspiring owners of a food ingredients business, construction/shop fitting business, brewery and food group.
Throughout these interviews, there are some key themes on succession planning which have been highlighted in the list below:
• Successful planning takes years – don't leave it too late.
• Define the strategic vision and values of the business before anything else.
• Talk to the upcoming generation about their aspirations.
• Enlist the help of key non-family members.
• Make rules on how the next generation can join and what is expected of them.
• Agree the age of retirement and how it is to be funded. Ensure all pension provisions are kept separate from the business.
• Look at establishing a family constitution and family council.
• Keep family members not working for the company as engaged as possible.
• When picking a successor, family firms should not expect to get it right every time.
(IOD, Director Magazine, February 2012)
Of course, you may know the above already but putting it into practice is another challenge that you find hard to fit in around the daily running of your business. CMC can help with this. CMC has guided many family businesses through succession over the last 20 years. We can work with you and your family to develop and effectively plan to safeguard your family firm’s future.
]]>The UK Manufacturing Purchasing Managers’ Index (PMI) has risen to 52.1 in January; this is a 2.4% increase since December and the highest level in the last eight months. Not only does the survey show output rising at a fast rate but also orders grew for the first time in seven months too. Foreign demand also rose for the second month running in January with improved order inflows from clients in Brazil, China, the Middle East and the US.
This is very encouraging for the manufacturing sector and hopefully should give a boost of confidence that our economy is improving and that a future recession is not imminent.
]]>As a business owner you also need to be an effective business leader. The most successful small businesses are those that have good leadership. Leadership can help your business survive and thrive. You need to keep calm, create a positive environment for you and your employees, be approachable, motivate and remain focused. This will then allow you to successfully plan, create a vision, empower others and lead yourself.
Shaking yourself out of the January blues and concentrating on your leadership and driving your business forward to increase productivity could help your business survive during these difficult months.
CMC work with owner managers to help them maximise their potential at the key stages of business development. Keeping our clients focused with monthly objectives and targets prevents any sales or cash flow problems to occur. Having control of their business and striving towards the next stage in their business lifecycle doesn’t allow our owner manager clients any reason to get the January blues.
Read here to see how CMC have helped re launch a manufacturing company into a profitable business. Theres no more January blues with this client!
]]>CMC’s new partner Phil McConnell , who covers West London and Surrey, feel's that 2012 is the year that these businesses will grow, innovate and expand.
Phil believes there are many opportunities for Small and Medium-sized Enterprises (SMEs) to grow and win some overdue gold medals. ‘During the past year, businesses have dealt with a weak economy, draining confidence for businesses. Going forward inflation should begin to decrease, having a positive effect on small business overheads and help consumer confidence. In spite of all these challenges, small businesses have shown resilience and will take opportunities when they arise. 2012 will be a great year for businesses based in the South East England; they will be in the spotlight regardless of Britain medal tally.’
If you want your own business to have sustainable growth with a high performance team and longevity to reach its own 60 year jubilee then you need to plan, match personal objectives to business directions and invest accordingly. Of course, growth can be challenging whilst running the day to day operations, this is where CMC can help.
Find out more about Phil and how he can help your business or call Phil on 0208 8920228.
]]>If you have never stopped to think about what happens next, be assured that you are not alone - there is no reason for concern.
‘Only half of owner managers have a clear financial plan in place for their retirement’ Business link South East Research 2007
It is quite usual for the demands of a growing business to consume most of your time and energy, and for whatever free time is left to you to be committed to your private life. We see many companies where the owner has had little chance to think about how they will disengage themselves from the business when the time comes – in such a way that both can go their separate ways – which is all that is meant by the term “exit strategy”.
]]>Businesses willing to put their faith in these unemployed young people would receive £2,275 and are expected to pay at least the minimum wage.
CBI Director-General John Cridland said:
"The Youth Contract is excellent news for young people across the country. The Government has developed our idea to incentivise businesses to take on the young unemployed. This will encourage firms to take a chance on inexperienced young people and help tackle the scourge of youth unemployment."
This may be a great opportunity for owner managers to get funding for quality qualified young people such as graduates who are currently struggling to get a start in their career.
As a business, would you be interested in this scheme?
]]>This has left many owner managers and entrepreneurs wondering where to get strategic and practical mentor support on establishing their new business, growing their business and selling their business.
Personal face to face business advice is no doubt the best method of guiding and supporting businesses through the exciting, challenging and difficult stages in their business lifecycle. It has also been reported in a Department for British Innovation and Skills survey on British support offline and online channels that SMEs do prefer this face to face personal interaction. So where does this leave owner managers?
CMC Partners has been helping owner managers like you for over 20 years to establish, develop, grow, rescue from cash flow problems and preparing for selling their businesses.
We are a friendly, approachable, qualified team of 11 partners based around the South of England, Black Country and Wales with actual day to day experience of running businesses.
“CMC provides a framework and an approach that help me to grow my business. And, when I need a specialist, I trust CMC to find me someone who I’ll be able to trust - and with whom I’ll be able to work – from within their extensive network. Whatever the problem, practical help and guidance are never more than a phone call away.” Patrick Knopp, Chiltern Cam & Engineering Solutions Ltd
If you are an owner manager looking to replace your Business Link face to face support then we are happy to help for your business success.
Please feel free to leave comments
]]>What are the reasons for this low survival rate?
CMC believe the primary reason is the failure to develop and effectively plan for the transfer of ownership and management of the closely held family business including grooming the right family member to be the successor. Other reasons are the next generation may have a different strategy or different ideas for the business which fail through a lack of management skills and support from the parents. Some generations simply have a different life style than the business founder and do not share the same drive and commitment that their parents had when building the business.
Failure can be avoided with careful planning and preparation with guidance from the right advisor. A Barclay’s survey of family firms reported that 61% of owners had NOT made a decision with regards to their business outcome when they retire.
CMC believe that those owner managers that manage the succession process well, will achieve the best outcomes - ensuring the business continues to operate successfully, and ensure the family relationship is maintained.
Don’t let you and your business become one of these family succession statistics.
CMC have the experience and knowledge to guide your family business onto the next generation.
Comments welcomed, we would like to hear your thoughts.
]]>77% of family firms are controlled by first generation
10% are controlled by the second generation
6% by the first and second generation
7% Sold or closed
In other words, only around a third of family firms tend to be passed onto the second generation and one tenth reach the third generation, the rest being either sold or closed down.
The above statistics seem to confirm the well known family succession phases discussed in our previous blog.
According to a PWC family business survey, 53% of family businesses that anticipate a change of ownership within the next five years have NOT drafted a succession plan. No wonder only a third of family firms are passed onto the second generation. Planning is the key to success!
Family businesses account for 3 million of a total 4.6 million private sector enterprises in the UK economy and have been described as the ‘backbone of our economy’. It is vital that family businesses beat the above statistics for the sake of their own family and the economy.
Has your business got a succession plan in place? CMC can work with your family to develop and effectively plan for the business transfer onto the next generation.
Comments welcome
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