Family businesses still play a crucial role in the global economy. From the Mom and Pop Business Succession to some of the multi-billion dollar conglomerates in the Fortune 500 Companies, these businesses cannot simply be wished away. In Japan, family businesses account for a big share of the trade after the great conglomerates that form a great part of the Japanese business complex. One of the biggest challenges facing many family businesses is that not many of them transition to the next generation successfully. Many of these businesses die with the founders or the second generation of owners or managers.
One of the main reasons for this is due to lack of proper succession planning to ensure there is a smooth transition from one set of owners to another. Research by the PriceWaterHouseCoopers indicates that some 52% of family business owners are unsure whether the next generation will be capable of managing the family business once they call it quits. This is why business succession is very critical for many family business owners. A business succession plan serves many functions in the family business.
For example, a plan prepared well in advance allows the members to take part in discussions and iron out their differences so as to avoid any costly future disputes. The other advantage of the succession plan is the relative security that it provides to the management of the business. In case there is a sudden death of the founder, members do not have to panic and the business succession plan will simply begin rolling out to usher in the new set of managers. Here are some critical factors which must be put into consideration when creating a business succession plan:
- Information gathering
- Assessing the needs of your organization
- Personal succession
- Developing the succession plan
- Implementing the succession plan
- Succession plan review
Because not all family members may have an interest in taking over the business, it is important to have a conversation with everyone so as to determine who amongst them shares the same goals. This can be carried out by a succession planning Tokyo service which can assist you in determining the strengths and weaknesses of each of the members.
Assessment of Needs
You will need business succession Tokyo advisors to carry out a thorough needs assignment. The business succession process must be well aligned with your organization’s goals, mission and objectives.
Business owners may have unique or specific needs which may not be understood that easily by the business succession advisors. Personal succession matters are, therefore, usually a core part of succession planning. Some of these can include the amount of shares to be allocated to each individual, the estate taxes, the cash flow needs of the business amongst others. Business succession advisors will usually come with a set of succession specialists that specialize in many areas such as succession laws , accounting, insurance and financial planners amongst others.
Development of the Succession Plan
The business succession advisors will come up with a written framework on how the succession is to be achieved. This usually includes many aspects, including the short term and long term objectives, agreements and other procedures. You can access business succession services for your Japanese company at http://xn--j2r801ab2u4ia.com .