Changes at the top of any company can have seismic implications – not least for those striving to be part of the business succession plan. If you are a senior manager this is your opportunity to discover if there is a place for you to move up to become an owner of the company. However, it’s important to take the necessary steps to ensure this is the right move.
Step one: Ask the current owner
An initial conversation with the owner will tell you whether there is a place for you in their succession plan, or if they’ve already made decisions that rule you out. Make sure to have this discussion as soon as you can, that way you have plenty of time to consider your next move either in the business or away from it.
Step two: Get informed
Getting independent advice is essential if you want to move into an owner position. Don’t let complicated lawyer talk bamboozle you. You’ll need to seek advice from an independent legal source and ask questions until you fully grasp the principles of any possible arrangement; what are the options. Be sure that you are completely aware of the risks and possible downsides, as well as how you will benefit.
Step three: Lead the process
To get this transition moving you must take the initiative. There will be many different options for how your new role will work within the framework of shareholders and other interested parties. A good grasp of the possibilities means you can lead that discussion when choices are being made. The most important thing is where this arrangement leaves you at the final trigger point – what voting rights do you exercise and what power do other shareholders have?
Step four: Cost it out
It’s vital that you are completely clear on what the cost will be. When the time comes for you to make the move, you need to be certain you can afford it. It’s not just capital, but also your tax implications. Taking advice early and planning for the event will help the transition to go as smoothly as possible.