How five simple words, “we have plenty of time”, can destroy decades of value creation and family harmony
David built his manufacturing company over 30 years, growing it from a garage startup to a £15 million enterprise employing 85 people. When his eldest son joined the business five years ago, family dinners were filled with casual talk about “eventually” taking over. “We have plenty of time,” David would say whenever the conversation turned serious. “I’m only 58.”
Then came the heart attack.
Within 48 hours, three decades of value creation hung in the balance. No formal succession plan. No clear leadership structure. No buy-sell agreements. Just a family in crisis, key employees panicking about their futures, and competitors circling like vultures.
David’s story isn’t unique. Across the UK and globally, I’ve encountered too many family businesses destroyed not by market forces, economic downturns, or competitive pressures, but by a single, seemingly innocent phrase: “We’ll deal with it later.” This isn’t always triggered by a major event, just the passage of time can make it really hard to address issues and concerns.
The Illusion of Plenty of Time
The statistics paint a sobering picture of procrastination:
- 47% of family business owners expecting to retire within five years haven’t identified a successor
- 66% of UK family business owners intend to pass their business to family members, yet only 34% have formal succession plans
- Nearly one-third of family business owners never intend to retire, effectively avoiding the succession conversation entirely, at least in their minds……
This isn’t about lack of awareness. Most family business owners understand succession planning is important. The problem runs deeper: it’s about the dangerous comfort of believing that time is unlimited and that informal family conversations constitute adequate planning.
The Real Cost of “Later”
When family business owners delay formal succession planning, they’re not just postponing paperwork – they’re accumulating hidden costs that compound daily. Here’s what “later” actually costs:
1. Operational Paralysis When Crisis Strikes
The Reality: Unexpected events don’t wait for convenient timing. Illness, accidents, or sudden incapacity can strike any leader at any time.
The Cost: Without clear succession protocols, businesses face immediate operational paralysis. Who has authority to sign contracts? Who can access bank accounts? Who makes strategic decisions?
In one case, a family business worth £8 million nearly collapsed because the founder’s sudden hospitalisation left no one with legal authority to approve a critical supplier payment. The resulting cash flow crisis took six months to resolve and cost the company two major contracts.
The Hidden Impact: Beyond immediate operational issues, uncertainty creates a ripple effect. Employees lose confidence, customers question stability, and suppliers may demand cash payments instead of extending credit terms.
2. Family Resentment from Unspoken Expectations
The Reality: Informal succession conversations often leave room for different interpretations. Children may assume they’re being groomed for leadership, while parents may view these discussions as theoretical rather than committal.
The Cost: When expectations don’t align, family relationships suffer. I’ve seen siblings turn against each other when they discover they both believed they were the “chosen successor.” Even worse, children who’ve shaped their careers around joining the family business may feel betrayed if plans change without formal communication.
The Compounding Effect: Family disputes don’t stay in the boardroom. They spill into family dinners, holiday gatherings, and everyday relationships. The business becomes a source of family division rather than unity, affecting multiple generations.
3. Key Employee Exodus Due to Uncertainty
The Reality: Top performers need clarity about their future. When succession plans are unclear, talented employees begin questioning whether they have a future with the company.
The Cost: Key employee turnover during succession uncertainty can be devastating. These individuals often hold critical relationships with customers, suppliers, and other staff members. Their departure can trigger a cascade of further departures.
Real Example: A technology services company lost three of its five senior engineers within six months when the founder began talking about “eventually” bringing his son into a leadership role. These engineers represented 60% of the company’s technical capability and took several major clients with them to competitors.
The Ripple Effect: Replacing key talent during succession planning is particularly challenging because uncertainty makes it difficult to recruit quality replacements. Who wants to join a company with an unclear leadership future?
4. Forced Sales at Below-Market Values
The Reality: When succession planning is delayed until crisis forces action, families often face compressed timelines that limit their options.
The Cost: Rushed sales typically result in valuations 30-50% below what structured, planned transitions achieve. Buyers know when sellers are under pressure and adjust their offers accordingly.
The Mathematics: For a £5 million business, this discount could mean the difference between £5 million and £2.5-3.5 million – a loss of £1.5-2.5 million that could have been preserved with proper planning. Research shows that only 30% of businesses successfully find buyers when rushed to market, leaving 70% facing closure or below-market transactions.
Beyond Money: Forced sales often mean losing control over buyer selection. Families may be forced to sell to competitors who gut the workforce or strategic buyers who eliminate the company’s independence entirely.
5. Legal Battles That Destroy Family Relationships
The Reality: Without formal documentation, succession disputes often end up in court, where family members become adversaries in a legal system that treats business assets as property to be divided rather than legacies to be preserved.
The Cost: Legal battles are expensive, emotionally devastating, and publicly embarrassing. They can take years to resolve, during which the business often deteriorates as management focus shifts from operations to litigation.
The Personal Toll: I’ve witnessed legal succession disputes destroy family relationships permanently. Brothers who built businesses together become estranged. Children sue parents. The business becomes a weapon in family warfare rather than a source of shared pride.
The Most Expensive Assumption: Informal Equals Adequate
Perhaps the most dangerous misconception in family business succession is believing that informal conversations constitute adequate planning
. Here’s why they don’t:
Legal Vulnerability: Informal agreements have no legal standing. When crisis strikes, family members may discover that their “understanding” with dad or mum has no legal protection.
Tax Implications: Delayed planning often means missing crucial tax optimisation opportunities. Estate taxes, gift taxes, and capital gains can be minimised with proper advance planning but become unavoidable burdens when planning is rushed.
Valuation Challenges: Proper succession planning requires understanding the business’s current value and how that value can be maximised or preserved during transition. Informal planning typically lacks this crucial foundation.
Stakeholder Confusion: Employees, customers, suppliers, and lenders need clarity about future leadership. Informal plans provide no external communication framework, leaving stakeholders uncertain about the company’s future.
The Procrastination Trap: Why “Later” Becomes “Never”
Understanding why family business owners delay formal succession planning reveals predictable psychological patterns:
The Immortality Bias: Many founders subconsciously believe they’re indispensable and that the business cannot survive without them. This underpins the idea of “having”we have plenty of time” and makes contemplating succession feel like contemplating their own irrelevance.
The Complexity Overwhelm: Succession planning involves legal, financial, tax, and family relationship complexities. Rather than tackle these systematically, many owners postpone action until they feel “ready” to handle everything at once.
The Conflict Avoidance: Formal succession planning often surfaces family tensions that have been politely ignored. Rather than address these conflicts constructively, many families prefer to maintain the comfortable fiction that “everyone knows their role.”
The Control Paradox: The very qualities that make someone a successful business builder – control, decisiveness, independence – can make them reluctant to begin the process of transferring that control to others.
The Opportunity Cost of Delay
Beyond the risks of procrastination, there’s also the opportunity cost of not planning early:
Succession as Strategy: Early succession planning isn’t just about transferring ownership – it’s about realising that you may not have plenty of time, optimising the business for transition and having a clear exit strategy and plan. This might involve professionalising operations, diversifying revenue streams, or developing management systems that don’t depend on the founder’s daily involvement.
Next-Generation Development: Proper succession takes years. Future leaders need time to develop skills, gain experience, and earn credibility with employees and stakeholders. Starting early allows for systematic development rather than rushed preparation.
Value Enhancement: Businesses with clear succession plans often trade at higher multiples because buyers have confidence in leadership continuity. Even if the current owner never plans to sell, this enhanced value provides options and security.
The Path Forward: From Informal to Intentional
Transforming informal family discussions into formal succession strategies requires systematic action across several dimensions:
1. Start with an Honest Assessment
- Acknowledge the current state of planning (or lack thereof)
- Identify family members’ genuine interests and capabilities
- Evaluate the business’s current value and future potential
- Assess external factors (market conditions, competitive landscape, regulatory environment)
2. Establish Formal Governance
- Create family councils to separate family and business decision-making
- Implement board structures that provide objective oversight
- Develop clear communication protocols for business-family interface
- Document roles, responsibilities, and decision-making authorities
3. Develop Comprehensive Documentation
- Draft formal succession plans with clear timelines and contingencies
- Create buy-sell agreements that address various scenarios
- Implement estate planning that optimises tax implications
- Establish employment agreements for family members joining the business
4. Invest in Next-Generation Readiness
- Provide systematic leadership development for potential successors
- Create opportunities for family members to gain external experience
- Implement objective performance evaluation systems
- Offer mentorship and coaching support
5. Plan for Multiple Scenarios
- Develop contingency plans for unexpected events
- Consider both family and non-family succession options
- Plan for partial versus complete ownership transfers
- Address scenarios where family members choose not to participate
The Success Stories: What Early Planning Achieves
Companies that embrace early, formal succession planning achieve measurably better outcomes:
Smooth Transitions: Businesses with formal succession plans experience significantly fewer disruptions during leadership transitions, maintaining better relationships with customers, employees, and suppliers.
Enhanced Valuations: Research shows that companies with formal succession planning programs experience 9% higher shareholder returns and are 2.5 times more likely to outperform their competitors, as stakeholders have confidence in management continuity.
Preserved Relationships: Families that formalise succession planning early report higher satisfaction with outcomes and maintain stronger family relationships throughout the process.
Optimised Tax Outcomes: Early planning allows for tax strategies that can save families hundreds of thousands or millions in estate and gift taxes.
Your Business Deserves Better Than “Later”
Your family business has survived economic downturns, market disruptions, competitive pressures, and countless challenges. You’ve built something valuable through decades of hard work, smart decisions, and perhaps a bit of luck.
Don’t let succession planning be the thing that brings it all down.
The businesses that successfully transition across generations don’t do so by accident. They do so through intentional, systematic, early planning that transforms family dreams into formal strategies.
The question isn’t whether you’ll eventually need a succession plan. The question is whether you’ll create that plan from a position of strength and choice, or from a position of crisis and compulsion.
At Exitologists, we specialise in transforming informal family discussions into formal, legally sound succession strategies that protect both wealth and relationships. We help family business owners move from “we’ll figure it out later” to “we have a clear plan for success.”
Because later is already here. And your business – and your family – deserve the security that comes from proper planning.
