Working out whether you are ready to take over a family business is a tough thing to do. Knowing how to take over a business is another thing entirely.
It will be a big decision for you, given all the responsibility. It’s daunting, so it’s only natural to look for advice on how to take over the family business.
So, here are some things to consider so you can make the best of the opportunities handed to you when it comes to running the family business for the first time.
How can I handle the transition of leadership?
One of the biggest worries you may have is the loss of the skills, knowledge and experience of the previous generation that ran the business. They built it into what it is today, but now they aren’t working there anymore.
That doesn’t mean all communication is gone. If your relatives simply retired, don’t be afraid to ask them for advice. They won’t mind if they care about you and the business.
Don’t hound them, though. Instead, get as much information and advice as you can now. The longer the succession planning stage pre-handover, the more opportunity there is to pass on knowledge and skills.
While you will appreciate their input afterwards, it is important that they give you space to learn from your own mistakes too and find your own way. Communication is key in finding the right balance.
Is it time to introduce new systems and procedures?
Speaking of finding your own way, you’re sure to have your own ideas and fresh perspective which can add value to the business. This may be new product lines or markets, as well as new systems and procedures.
Technology is always developing and creating efficient new ways of doing things. It may be that the company has always been at the cutting edge but a generational change in leadership is a great opportunity to test whether the business is making the most of all the technology now available.
This could be digital technology like improved databases, website functionality or SaaS software; hardware like upgrades to machinery, or making use of new equipment like drones or virtual reality; or third-party/outsourced services in fields such as recruitment or digital marketing.
Should I consider cloud accounting software?
When taking over a business, it is common to find that much of the financial information is buried in paper form, or unwieldy spreadsheets. Sometimes it only exists in someone’s head.
This can make it difficult to get to grips with the business finances, but this is essential in order to move forward. To gain better visibility of the figures it will be worth considering online accounting software, like Xero.
The benefits of cloud accounting are wide ranging. Xero (and its huge array of apps) revolutionises both the efficiency with which basic accounting tasks can be carried out, and what is possible with the data it stores. You can gain tremendous new insight into your business.
Xero also enables tasks like reconciliation, invoicing and bookkeeping to be done with a few clicks of a button or a quick photo on a camera phone. And submission of VAT returns is done seamlessly in line with the government’s Making Tax Digital requirements.
Xero helps you understand the business finances, see your figures in real time and look ahead to the future.
However, Xero is only as good as the person using it. After all, it’s not going to be much use to you if you don’t know the first thing about accounting technology and what is required by HMRC or Companies House.
Talk to us about online accounting and Xero.