Succession Planning

There are two dimensions to succession planning in businesses – leadership succession and ownership succession.

In the short video below, Thomas Zellweger, Professor of Business Administration at the University of St.Gallen, a specialist in family business, considers these two different forms of succession and explains why businesses should follow this six-step-process:

1. Defining succession to whom – taking account of the generational time frame
2. Establishing what is being transferred – is the business in a form ready to pass on?
3. Planning the transfer of governance – changing CEO, board, and equity
4. Setting a price – implications for the successor and vendor
5. Ways to finance the transfer – private equity, vendor loans, banks loans etc.
6. Addressing tax and legal issues – asset transfer and inheritance tax implications