Business owners warned against hesitating on succession planning

Business owners across Birmingham have been urged to make their succession planning strategy a key priority in 2023 - or risk potentially costly headaches in the future.

Planning for any future changes in the ownership or management within the company may not be on the immediate agenda for many businesses in the first quarter of 2023.

However, Paul Hunt (pictured) - who heads up the Business Succession Planning team at leading Midlands law firm Higgs LLP - has urged businesses to act swiftly, regardless of whether there are any imminent changes in the pipeline.

He said: “We totally understand that, occupied with the task of building and operating a successful business, it is not always easy to find the time and headspace to step back to review the structure of the business you own or are managing and plan for the future.

“Failing to deal with succession planning, however, can create commercial uncertainty and unwanted personal difficulties in years to come.

“Even for new start-up businesses, beginning the process of thinking about succession and the long-term vision for the company would be a crucial step forward in 2023.

“It 's never too early to start succession planning and it 's an integral part of the long-term success of any owner-managed business. This is not just about sale or retirement. We work with businesses in anticipating many possible scenarios. ”

Higgs LLP 's succession planning service guides business owners through the entire process and may result in revised structures or an updated set of documents - including Articles of Association, Shareholders Agreements and Cross-Option Agreements - being finalised to shape the future direction of the company ownership.

Paul added: “Of course, the documents form an important part of the succession planning process but the most significant element is the discussions which take place with all relevant parties to reach a consensus.

“No company will start this process with a blank sheet of paper. There will be a current or default position which will apply in the event of ownership changes. In many cases, owners of businesses will not be aware what that is and it may not be what they would expect or want.

“Through early planning, we can implement changes to suit owners ' business, family and personal requirements and avoid unwanted surprises.

“Our role is to help bring the various aims of the parties together and find a solution that suits everyone in a revised set of documents which are then kept under review, maybe once every year or two, to ensure they reflect any change of circumstances.

“Even the most minor of changes in the business or to personal circumstances can have an impact on succession planning arrangements.

“Any solutions will be tailored to the needs of the business and the individuals concerned. There is no one-size-fits-all approach when it comes to succession planning. ”

For an initial conversation around succession planning, contact Paul Hunt on 01384 327123 or [email protected]