- September 28, 2023
- Updated 4:01 pm
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How to Make A Successful Family Business Succession
Family businesses account for a significant segment of Singapore’s economy and continue to dominate several prominent industries in Singapore. The continuous and consistent success of family businesses across generations is crucial for job creation and the continued growth of Singapore’s economy.
As per recent surveys and reports, 64% of family businesses in Singapore are expecting a high growth rate in 2021, in addition to a whopping 90% growth rate for 2022.
With family businesses taking over the Singapore economy, succession planning is a crucial part of the stability and growth of family-owned businesses. It facilitates frequent business communication and prevents the disruption of business workings and operations.
In addition, it can also minimize confusion and conflict among family members and eliminate the need for costly legal proceedings.
The Challenges Faced In Successful Succession Planning
Succession Planning is often overlooked when business architectures or business transition plans are drafted.
Considering Singapore’s highly competitive and open economy, Family businesses today face three critical challenges: the complexities of an open and highly competitive economy, the need to innovate & grow, and the constant aggressive international competition.
Singapore’s economy is flooded with family businesses that prioritize an overriding commitment to strong family values and an increasing number of family members that want to dominate the industry.
There is a strong need for a well-articulated and well-planned family business succession plan that lays definite rules and regulations and clearly defines every family member’s role and responsibility to carry out within the family business.
The Blueprint of Successful Family Business Successions
Strategic planning that focuses on separating ownership retainment for business management. It includes a responsibly & professionally designed succession plan that is legally formalized and includes valuation structuring, outcomes and risk assessments, and organized talent management planning & development within the family business is crucial.
When every member is clear about their role in the family business, one can expect a smoothly working and operating family business that grows into a legacy and can be taken over by the future generations to come.
Succession Planning produces an outline for business growth and effective governance needed by several family-owned businesses in Singapore to successfully navigate the challenges faced by the over competitive economy and deal with aggressive competitors.
Family business owners can face many complicated challenges like the younger generation not showing any interest in taking over the business. In addition, there might be no apparent successors among family owners; a planned succession plan proves to be extremely useful and advantageous in these situations.
Succession Planning Singapore: Lighthouse Legacy Planners
Planning & Executing a succession plan for your family business can be complicated. Lighthouse Legacy Planners are passionate to help people design and build their unique legacy via our succession planning services. We believe that every family-owned business has its unique challenges and characteristics.
Our consultation services include workshops, seminars, consultations, and onboarding processes that help us plan, draft and execute a successful and responsible succession plan that perfectly suits the working of your family business.
Remember, the world’s largest and influential family businesses view succession as a long-term process and a profitable investment that clearly defines succession responsibilities and helps prepare the next generation for future leadership.