For many of us, when it comes to retirement time all we have to think about is what our last day will be at work and how we will draw down our pension. However, as more and more people set up and run their own business, retiring becomes something that we need to think about and plan for a little earlier. This month, in the first of a two-part series, we turn our attention to what that entails, so if you are in that position read on to find out what the key things to think about are.
Thinking ahead
While you are probably more concerned with what has to be done tomorrow, perhaps next week at most, on a day-to-day basis, taking a bit of time to plan ahead will stand you in good stead when the time to retire actually comes. You have a two options:
- Identify a suitable person to take over the helm. This could be a family member if it’s a family-run business and assuming there is someone suitable and interested in running the business, or an outsider who can bring fresh ideas.
- Sell the business or merge with another. If it is the right time to do so, you will need to identify suitable organisations or buyers – this could be outsiders or it could be the existing management team. We will explore this option in greater depth next month.
Identifying a successor
Finding the right successor can take a little time and effort, but it will be worth it in the long run as you will enjoy your retirement a lot more if you know someone trustworthy and capable is now in charge. It may be that you need more than one person to split the responsibilities you have taken on over the years, so the first thing to do is to list all the tasks that you manage. From here, consider what skills and experience are necessary for success in the role and then you can begin to look at individuals you know who could be in the running for the job. It could be that the right person needs some mentoring or training, so early engagement in this process could pay dividends in the long run.
As part of your succession planning it is also important to communicate regularly with your team and keep them informed of progress. It is also worth putting a succession plan in place for them, particularly for those employees who are key to the business; losing them at a crucial handover time could be detrimental to the business in the short to medium term.
Put a succession timetable into place. This will allow you to introduce changes in a staged manner and one that is less disruptive as staff – and your successor – will be prepared for.
Set key goals for everyone to work towards: yourself, your successor, the management team, and any other key staff members. This will also help you to track progress and identify any potential stumbling blocks sooner rather than later.
Have a contingency plan. You never know when and how things may change. Having a contingency plan in place to deal with key issues, such as your identified successor not being to take over or having key staff leave the business, will ensure that you manage things smoothly with minimal impact on your day-to-day operations or reputation.
For advice or help with putting a handover plan in place for a retirement handover, talk to our specialist team at Hammonds Accountants today – after all, we are here to make your life easier. You can reach us on 0203 007 4990 or by emailing us at .
