At Baker Tilly Ecuador, we consider ourselves experts in business advice regarding family successions, a process in which family businesses are organized and prepared for the transfer of management from one generation to another. This is done by assuring the production level and active presence in the market for the business, generation through generation.
By the word succession we immediately think about retirement, even if the CEO leads a public or private enterprise., the connection is immediate, and rather inaccurate.
In private businesses, succession deals with the founding member or owner that retires and sells the business to a third-party member, or to a family member. Even if this conjectures might not be incorrect, they do not communicate accurately the real meaning of succession for private businesses.
This typical response about succession is, by far, one of the most dangerous barriers to the successful planning of an effective succession and is probably the first impeding factor that must be overcome.
The eventual retiring of a founder or an owner might be the product of a succession process, but it is not its purpose. Succession is aimed to be the process that will assure the continuity of a business beyond its actual management. This is done by identifying and understanding the conducting factors of the capital value of the business, the elements that will allow for a suitable competition in the market, and the growth and investments in these factors. A focus on these determining factors will not only allow for an effective succession, but also to will create an increasing growth in the capital value of the business during its existence.
We think of succession planning as a process of Business Evolution. Permitting the increase of wealth growth of generation through generation whilst guaranteeing familiar union, individual growth and a sense of contribution is the essence of the succession planning, this is Business Evolution. It is a process that will start the day that business starts and continue throughout its existence.