We often talk about 'Succession Plans' or 'Succession Planning', but what actually is it?

A succession plan is a document that details how your business will look in the future, it can be detailed, including information about key triggers or metrics before share tranches are released to an incoming equity holder, sell down dates, training or even courses that an incoming equity holder has to do before they can buy shares. It is often a working document, shifting and changing as the business evolves. 

Succession planning is simply the process that gets you this document. We like to think of it as a six step process:

1. Understanding your business valuation now

2. Understanding your objectives, as the current business owner

3. Understanding the drivers of the incoming equity holders

4. Agree the basic terms of the succession plan and document this in a draft report

5. Prepare a Letter of Offer and Terms Sheet to assist in the Legal Process; and finally

6. See the work come to fruition, assisting with any ongoing implementation - such as tranches into the future 

Succession Planning can be a great process to help you engage and reward key team members, and secure potential purchasers in the future - breaking your business down into small bite sized pieces. 

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