With a significant number of advice principals tipped to sell their businesses in the near future, business owners should take into consideration the needs of their staff, a succession planning consultant has said.
A recent poll conducted by Risk Adviser asked readers whether or not they were planning to sell their business this year (of which 144 readers participated), and found that 51.4 per cent would be looking to sell.
For those looking to sell, however, principal of consulting firm Financial Planning & Succession Peter Fysh said practice principals should take into consideration the future of their staff.
“As a principal, ask yourself the question: how successful would I have been without the support of key staff? Importantly, what value do your clients place on your staff?” Mr Fysh asks in an upcoming Viewpoint for Risk Adviser.
“Planning for your succession is a critical process, and it is essential that key staff have buy-in with the process, thus ensuring any doubts are removed about their future in the business.
“Unlike you, the principal, they may well have plans to keep working for some years,” he said.
Mr Fysh also said that for many practice principals the 'reality' is they do not have a documented and funded succession plan in place.
“Apart from the obvious benefits in having such a plan in the event of unforeseen circumstances, there are other benefits to the business. These include ensuring all your staff are on the same journey and, where appropriate,they also have equity in the business.
“The reality is that some principals do not appreciate the benefits of spending time on developing their succession plan, believing that it can be adequately addressed at a later date,” he said.
“What they don’t realise is that it is something that cannot be done overnight, especially when giving consideration to tax and legal issues. Why would a principal, who has worked hard over 20 years in building a planning business, not allocate time to address this key issue?”