Vital for firms to plan for successor

DECIDING who takes over needs to be done early and unequivocally, an expert in succession planning told delegates yesterday.

Peter Leach, the chairman of the family business centre at international financial advisory firm BDO Stoy Hayward, said succession was a process that needed to be managed. Failing to handle the changeover properly could lead to family members making false assumptions about the business’s future and causing difficulty for the family, he said.

Up to 70% of family firms had no succession plans in place. These businesses needed to be educated, to help them overcome the obstacles involved in handing over power and make sure that decisions were made for the good of the business and not to provide easy answers to family squabbles, said Mr Leach.

It was a good idea for people thinking of taking over their family business to work elsewhere and build up their experience outside their own company. “It’s a curse to bring people straight out of college into the family business.”