Eccentric Willy Wonka boasts a lot of enviable skills as a businessman – he’s innovative, understands his target audience, and inspires loyalty from his employees. But his skills at succession planning left a lot to be desired.
Over the years many actors have taken up the role of Roald Dahl’s iconic chocolatier Willy Wonka. The character is getting a new lease of life in December when Wonka releases in cinemas.
While the new movie looks at how Wonka became the owner of a successful business selling fantastical sweets, the original novel, Charlie and the Chocolate Factory, focuses on his succession plan.
With no children to leave his business to, Wonka hides five golden tickets in chocolate bars to win a tour of his world-famous chocolate factory. He plans to pass on his company to one of the lucky winners.
Despite the risky approach, the competition pays off when Charlie Bucket secures one of the golden tickets.
While Wonka’s method might be perilous, research suggests some business owners could also be taking a risk when it comes to their firm’s future.
According to a report in FTAdviser, more than a third of businesses have no succession plan in place, and a further 10% haven’t thought about it.
Yet, what will happen to their business is a concern for many business owners. 21% said they were most worried about seeing their business fail and 18% were concerned about their employees’ prospects.
Without an effective succession plan, there’s a chance your business’s legacy doesn’t live up to your expectations or pass to the person you want to hand the reins to.
Creating a succession plan can seem daunting and involve a lot of work. However, if it’s something you’ve been putting off, here are seven reasons to make it a priority.
1. It provides a chance to think about your different options
There’s more than one way to step away from your business when you’re ready. You might plan to pass it on to your children, or you may want to sell it to fund your retirement.
Going through your preferences now provides an opportunity to explore the different options and consider which would be right for you.
2. The process could help you identify potential leaders and skill gaps
Handing over his business to someone with no experience might work well for Wonka, but it’s not advised.
As part of your succession plan, you may review the skills and expertise of your current team to identify where there could be gaps in the future. You might then create a training development programme to upskill existing employees or seek to hire someone who fits your needs.
It’s a step that may improve the long-term security of your business and give you peace of mind.
3. Preparing your business may be a lengthy process
Depending on your plans, preparing your business to hand over could be a process that takes years. Perhaps you need to dedicate time to training existing employees to take over some of your tasks, or you might want to sell the business with an established customer base that you need to build.
Setting out your succession plan now could mean you have more options, reduce stress, and give you a chance to overcome potential obstacles.
4. It could improve processes in your business now
When creating a succession plan, you’ll often want to consider how the business would operate if you weren’t there and how to make processes as efficient as possible.
So, even if passing on your business is years away, a succession plan can be a useful exercise. You might find ways to increase productivity, cut costs, or help your team work more efficiently. It could improve your business now and mean it’s in a better position in the long term too.
5. A succession plan could boost confidence in your business
When Wonka announced he’d be handing over his business to an 11-year-old boy, we’re sure not everyone was thrilled about the decision or optimistic about the firm’s prospects.
A lack of a succession plan could harm confidence in your business. For instance, customers might worry about whether you’ll be able to fulfil orders over the long term. A succession plan could also give your employees more confidence in their security.
6. A succession plan may be useful if the unexpected happens
A succession plan isn’t just useful if everything goes according to plan, it might also be valuable if the unexpected happens.
If you fall ill, having processes and a leadership team in place that you can trust could make the difference between your business continuing to run smoothly or facing challenges. Knowing that your business is in safe hands might mean you’re able to focus on your recovery.
A robust succession plan could also make it easier to step back from your business sooner than initially planned if you decide to.
7. Your decision may influence your long-term plan
As a business owner, your firm is likely to affect your lifestyle and finances.
Your business plans and when you hope to move on might influence areas like your pension or investments. So, understanding how and when you want to move on from your business could mean you’re able to make informed decisions about your personal life and assets.
Contact us to talk about your succession plan and what it means for your future
If you’d like help with your succession plan, we may be able to offer support and could make your decisions part of your personal financial plan too.
Please contact us to arrange a meeting to talk about your aspirations.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
Succession planning is not regulated by the Financial Conduct Authority.
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