What happens to your business when you retire?

Having a break away from work over the Christmas period may give you the rare opportunity to think about your retirement plan and the future of your business.

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”. 

Why do I need an exit strategy?

Why do family business successions fail?

Following on from CMC’s last two blogs on family succession we wanted to share our view on why family successions fail.

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.