Succession Planning - A Guide for Will Writing Businesses

In the estate planning business, we encourage people to prepare for the future: whether that’s starting a conversation around death, getting a will and LPA in place, or making a plan with those important to you to prepare for all eventualities. Life is busy, especially for business owners, and despite what we advise our clients, future planning can often take a back seat.

Your business, legacy, and clients are important, so having a succession plan is essential.

What is a succession plan?

Simply put, a succession plan is the process of deciding what happens to your business when you retire or if the unexpected happens. Particularly in smaller businesses, where the owner is crucial to the day-to-day success of the organisation, having a succession plan is critical to ensuring the business can operate well in your absence.

Why do you need a succession plan?

• To make sure you are prepared and protected for the unexpected
• To provide peace of mind that your business and clients are in safe hands
• To enable you to exit on your terms and your timelines
• To help you receive value for the business and client bank you’ve built
• To provide clarity for the future

Effective Succession Planning: The 4 W’s

Who do I want my successor to be?

This could be someone within the business, a family member, or selling to another business. It’s important to find someone that aligns with your values, who can provide a professional service and will continue to run the business well. This is especially important if you have an “earn-out” tied to future business revenue.

When do I want to exit?

Do you want to sell up and have your feet up on the beach next week? Would you like to taper down to part-time over a period of months or years? Would you like to remain in the business for a period of time to take the pressure off? It’s your business and having a plan helps dictate the terms by which you exit.

What plans and processes do I need to put in place?

The best litmus test is: If I didn’t turn up to work tomorrow, what would happen? Does everyone know their roles and responsibilities? What processes do I need to put in place? What training do I need to make sure my staff have? Does anyone else know the nuances of the business? Is there a contingency plan a trusted third party could access? For a buyer, this provides confidence that the new owners could manage the business in your absence, making any sale more attractive.

Worth: what is my business/will bank worth?

Ultimately, a business is worth what a buyer is willing to pay. However, having a succession plan and an idea of the business’ value well in advance of any negotiations helps put the power back into the hands of the seller. For will writing businesses specifically, factors such as the quality of your client bank, the profitability of the business, and the ease of transition will help boost your value.

If you’d like a free, confidential conversation around the value of your business and steps you can take for the future, our team can help.