Planning For A Successful Succession
Planning and managing a family succession can be fraught with emotion and impact on relationships away from the business, so if passions are running high or it is difficult to take the challenging decisions needed for a successful handover, Howe recommends bringing in outside help to remove emotion from the decision-making process and help all parties focus on making choices that benefit the long term health of the business.
Recognising this challenge is what led Andrew to join forces with other industry experts to create Bridge Leisure Management in 2008. 10 years on, the company provides day-to-day management of holiday parks for owners who want to successfully step away from their business.
He says: “As professional managers we can focus on the park, its success and development. We don’t have an emotional attachment so we can focus on what is good for the business and good for the owner.” Discussing the transfer of the business from one generation to the next can often unearth unresolved conflicts between family members, such as arguments over business direction, perceived family favouritism, or lack of confidence in abilities.
Rather than confronting and discussing these families are more likely to bury their feelings and beliefs, eroding trust and increasing their stresses during the succession process.
At this point, outside support can be invaluable in helping the process of handing control from one generation to the next, when any changes made by the younger group keen to make its mark can be seen as a criticism of the work done previously by family.
“We work alongside families to help get the best from everyone and maintain an absolute focus on the business Holiday park owners are spending so much time working that they are failing to plan for a successful retirement. Andrew Howe, chief executive of Bridge Leisure Management says that one of the biggest mistakes park owners make is to ignore questions of succession.
He says: “If your goal is to handover to family members, there can be many tricky questions to answer, made more difficult by the close relationships of those involved.
“For example, what if the next in line is not ready, not up to the task of running your business, or if there are several family members vying to take over a small park where there’s really just one job to fill?” Howe’s belief is that successful succession planning must start years in advance so business owners can identify and address the weak spots and potential problems of handing over to family members.
DEVELOP AND THRIVE
By clarifying the skills that your business needs to develop and thrive, you can decide who is best placed to take over responsibility for running the park and put in a place a training or coaching plan to account for areas where they are lacking. Giving family members a long-term view of the park’s potential can help them understand what is expected of them for a successful
handover, but for park owners who have grown their operations as the sole person in charge, it can be a difficult change in mindset to start having open and honest conversations about their business. Howe’s advice is to make family members responsible and accountable for the park’s growth by showing them the business challenges and future opportunities.and success. All parks are different and so our role is to find a management solution that works for each individual owner.” In many instances, holiday park owners may discover that their children don’t share their same enthusiasm for succession, and so their next step may be to look at selling.
Yet the emotional ties of a family business can often make this simply too difficult a decision; who wants to be the generation that sold the family business? Additionally, the commercial realities of a sale can create additional issues, especially when an owner has over-estimated the value of, and interest in, their business. Bridge Leisure worked with a caravan park owner who expected his son to take over when he retired. But after completing university, his son decided on a different career path. Says Andrew: “They thought of selling but were in for a shock when the agent’s guide price was far below what they expected and was at a level that the owner felt neither reflected his hard work nor the true value of the park.” Their response was to bring in Bridge Leisure to take over the park operations in return for a management fee and a bonus to grow the business, while the owner kept the profi ts and retained ownership of the park, ready to benefit from a future sale when profits and market conditions get better. “By bringing a degree of flexibility and freedom to the park owners, they could step away from park operations but still benefit from the true value of their business,” says Howe. “Wrestling with the ‘whys and wherefores’ of succession or a sale can put a stop to owners successfully retiring from their business, and making a decision on what next can be heartbreaking. “Putting a plan in place early, and taking control of the different options and outcomes, is the simplest way to make your next steps a success.”
Bridge Leisure Management
Tel: 01908 067 900