If you own or part-own a business or a professional practice which is family owned, it is important that your estate and succession planning begins today. As a business owner, it is quite likely that a significant portion of your wealth–and your family’s source of income after your death–is tied up in the family business. Either result takes planning or preparation and business succession planning should be a priority for every owner of a private business.
There are two common reasons why a family does not retain their business. The first reason is straightforward – there may not be a qualified successor. However, even though these businesses will not be passed down to the next generation, you can still take steps to ensure that the value of your business survives.
The second major reason for unsuccessful business transitions is more unfortunate. In many cases, businesses fail or are sold off due to a lack of planning. Although most of us are careful to safeguard our personal assets, it is easier to understand why many people avoid dealing with the issue of business succession.
Running a business is hard work. The daily work needed to make a business successful leaves little or no time to plan for the ownership and management changes that will inevitably occur. None of us likes to think about or discuss our own mortality, but the process of succession planning, like good financial or estate planning, is all about what will happen after we are retired or gone for good. The longer owners wait to design and implement a succession plan, the greater the risk that the plan will not meet their goals.
The risks also increase that the business will fail along with the health of the owner. When a business owner does not implement a succession plan before he or she is disabled or dies, the value of the business often drops rapidly. In fact, it is not uncommon that both the business and the business owner die on the same day. This means that the owner’s intended beneficiaries will not receive the full value of the business. Planning five years in advance is good but planning ten years ahead is even better.
Augment prides itself in the appreciation of family intricacies and offers a true relationship-driven approach with the highest standards of discretion. We help promoters of businesses by conducting an in-depth analysis of prevalent ownership and providing recommendations for implementing best practices. Our services in business continuity and succession planning covers the complete spectrum of a Family owned business’ structure, including governance, organization matrix for operations and investments, risk management practices, identification of non-executive experts on the Board of Directors, family-constitution, wills, next-gen training, protection of Intellectual Property, and strategic business planning.
When seeking out professional help, choose carefully. Our experts at Augment Management Consultancy have several years of experience in helping business organizations across UAE and in particular associate with Family Business Succession Planning.