No matter what kind of business you have, it is always important to have a succession plan. With a family business, however, there’s a key difference you need to keep in mind when drawing up your handover strategy.
Speaking on the My Business Podcast, Alexander Laureti, a partner with accounting firm LMS Advisory, says a succession plan within a family-run business should be more of a 'gradual decrease' than a 'complete out' – a strategy that he is employing within his own business.
“We manage a team of accountants who look after a certain business segment. As with any business, the older generation … have run their race. They'll want to start reducing their hours. They'll want to take more holidays. That's something that I think that everybody who has worked hard all their life should be entitled to,” says Alexander.
However, Alexander says he doesn’t see LMS Advisory founder Sergio Laureti fully retiring.
Instead, he sees Sergio picking and choosing how he spends his time in the business, more as a “lifestyle choice to continue working” than out of necessity.
“I think that people want to build themselves to a place where ... you can call it a retirement plan or any plan that you like, but there's nothing wrong with wanting to get to being successful.
“You shouldn't feel bad about being successful and getting to that finish line sooner, and then saying, ‘OK, it doesn't just mean then that I've made my money and that I'm just going to sit on the beach forever’.”
If you choose to reinvest your time into something that you love – and you're working because you want to, not because you need to – then you've already reached your retirement goals, suggests Alexander.
“You're already living that lifestyle that you want to. Everything else along the way is a bonus,” he says.
Hear more insights from Alexander about the challenges and benefits of expansion through acquisition, as well as his approach to selling in an industry not traditionally associated with sales, on the My Business Podcast now!
For more information, check out these articles on succession planning options and four myths about selling a business as part of a succession plan.