Prepare a “Flash” Succession Plan
If a business doesn’t have time to prepare a comprehensive plan, another option is to prepare a “lean” succession plan. A shorter process, more like a list of action items in the event of a crisis. Run through the scenario of what would happen if a key family member passed away.
- Helps the family become more aware of succession planning and its importance
- Helps to put in place some basic top-level estate planning initiatives
- Provides an operations action plan if there is a crisis
- The “flash” succession plan deals with the non-sensitive issues only
- Serves as a foundation for a later more comprehensive succession plan
Going through this exercise even if you aren’t experiencing a crisis can help you become better prepared for succession planning and transition to the next generation.
It is a little like insurance, we know we need it, but we find it hard to work on something that we hope will never happen.
One method of motivating family members to discuss these sensitive issues is to create a sense of urgency. Discussing examples or case studies of family businesses that didn’t have a succession plan in place can show family members the consequences and impact on the family and the business.
Some examples:
- Horror Stories-Family businesses that failed without having a succession plan
- Crisis Contingency-What would happen if the founder was suddenly incapacitated?
- Financial Planning-Comparing the differences in family wealth with and without a plan
Complete the discussion by helping family members recognize the comfort and security of having a succession plan in place.
