NO SUCCESSION PLAN IS A RISK

A Succession Plan Is Risk Management

hile art imitating life doesn’t usually translate into the world of Calgary business, the latest TV season of Succession, about the scripted maneuverings and vicious shrapnel of Logan, Kendall, Roman, Shiv and the rest of the fictitious Waystar RoyCo family, may trigger more mundane but important interest about the critical issue of reallife business succession.

In many ways, and for various contemporary business reasons, succession planning experts are sounding an alarm about avoiding the business disaster of procrastination or no succession planning at all. They candidly but bluntly urge Calgary business owners and executives into action, warning that, in some situations, failing to plan translates into planning to fail.

The no-holds-barred business reality is that making no plan is also a decision. A risky and poor decision, but a decision just the same. And some recent Canadian business trends and figures make the decision even more critical.

• Some 76 per cent of Canada’s business owners plan to exit their business within the next decade, with over $2 trillion worth of business assets potentially changing hands.

• Only one in 10 business owners (9 per cent) have a formal business succession plan in place to ensure a smooth transition.

Trends and specific case stories echo the cause and effect that, without succession planning, a successful business is

The urgency around not planning for succession flags a checklist of weighty risks and consequences:

4 Owners failing to realize the full value of their business.

4 Alienating potential successors (senior management, family or outsiders).

4 Inability to achieve the mission and realize the vision and putting the business at risk.

4 Increased difficulty in obtaining longterm financing if lenders perceive inadequate business planning.