Succession Planning

The Importance of Starting Early

Auckland Office – Mark Jones now has an office in downtown Auckland. Call us free anytime on 0800 404 202 to make an appointment or send us a message.

At Hallam Jones Insurance and Financial Advisers we have been in business since 1976, and we have been involved in succession planning for much of that. Collectively our advisers have more than 45 years of experience to draw from.

Over this time we have helped people pass on farms and businesses to family members, key employees and other shareholders and partners. Some of these have been happy affairs - such as normal retirements or principals wishing to explore other opportunities. Others have been potentially catastrophic affairs arising from the death or disability of a business partner or shareholder.

Unless a business is to cease trading as soon as a principal exits the scene, succession becomes an issue. If the business has capital value a ‘how to’ plan is needed for those wishing to buy into the organisation. And, like most things in business, unless a plan can be formulated, agreed upon and adhered to - when the time comes for shares to change hands, funding the process is likely to be too hard to achieve.

This is where we come in. In a structured six-part process we:

• Meet with the affected parties, discuss the sorts of things we will be looking at and consider the types of concerns involved.
• Gather all relevant information, including the types of entities we are dealing with, the amounts involved and the situations both the existing owners and the prospective successors are in now, and are likely to be in for the future.
• Create a plan setting out the ways to provide the funds necessary to recompense the existing principals for the business changing hands. This will consider funding solutions and also address the fair and equitable position of everybody concerned, including existing shareholders, partners and family members.
• Liaise with other professional advisors such as solicitors, accountants and other business advisers. Here we can recommend alternative specialist professionals if required.
• Set in place arrangements to proceed with the recommendations which have been agreed upon.
• Review and monitor the situation on at least an annual basis to ensure that things remain on track, that situations have not changed and that the plan’s relevance continues.

Your business is the sum of the efforts you have put into building it and whoever you plan to eventually pass the baton onto will need time to repay you for these efforts. The earlier a plan is put in place to make this possible the more likely it is to succeed. So if you want it to work, now would be a good time!