The Confidential SME Succession Playbook

Who should use it

Founders, family shareholders, non-family executives and advisers preparing a transition without confusing three separate questions: leadership succession, ownership succession and a sale of the business.

A family can change the CEO without selling. It can raise capital without losing control. It can sell a majority while retaining a transition role. The first task is therefore to define what the family wants to preserve, monetise or transfer.

IFC family-business guidance emphasises governance structures and formal CEO/senior-management succession planning. This playbook applies that continuity logic without pretending to resolve personal inheritance law.

Outcome

A succession/transfer file should contain explicit shareholder objectives, ownership-family-management maps, decision protocol, founder-dependency assessment, management continuity plan, confidentiality map, transaction-readiness file, sequenced communications and a post-transaction role plan.

Journey

INTENT → FAMILY ALIGNMENT → GOVERNANCE → CONTINUITY → READINESS → CONFIDENTIALITY → BUYERS → NEGOTIATION → TRANSITION

Gate 1 : Define the real decision

Each significant shareholder separately states the objective, horizon, control to retain, operating role after the transaction and unacceptable outcomes. Divergence is not failure; it is a risk to resolve before bringing in buyers.

Gate 2 : Separate ownership, family and management

Build three maps: who owns, who governs, and who actually runs critical functions. One family member may occupy all three with different authorities. The overlap needs to be explicit.

Gate 3 : Measure founder dependency

Test sales, banks, suppliers, pricing, recruitment, signing authority, technical know-how and institutional relationships. For each: replaceable, documented, transferable, time required, alternative owner.

Founder dependency does not prevent a sale; it changes preparation, transition and sometimes economics.

Gate 4 : Prepare management succession

If the family expects to retain the company or a stake, formal CEO succession planning matters. Define future role, criteria, candidates, timetable, development, decision authority and communications.

Gate 5 : Clean the family/company boundary

Identify family expenses, personal assets used by the business, separately owned real estate, shareholder loans, related parties, family employment, personal guarantees, dividends and current accounts.

The objective is not cosmetic adjustment. It is transparent treatment.

Gate 6 : Decide what can be said, to whom and when

Build a confidentiality map covering family, board, key management, advisers, employees, bank, customers, suppliers and buyers. For each define permitted information, trigger, spokesperson and message.

Gate 7 : Prepare the company before market exposure

Use the P01 Deal-Ready evidence domains: corporate/ownership, finance, tax, commercial, contracts, people, operations and permits/litigation. Institutional Deal-Ready certification, if pursued, remains a separate human decision.

Gate 8 : Select buyers against family objectives

Highest headline price may not match continuity, management or timetable objectives. Define capacity, thesis, proposed governance, funding, management treatment, timetable and factual track record before comparing offers.

Gate 9 : Negotiate the seller's post-close role

Possible structures include immediate exit, short transition, consultancy, temporary management, rollover equity or non-executive governance. State duration, authority, compensation, objectives, reporting, conflicts and exit mechanism.

Gate 10 : Prepare the first 100 days

Cover communications, strategic customers, management, banks, suppliers, authorities, cash, reporting, prohibited/approved quick wins and commitments made during the sale.

Family governance questions before launch

Stop conditions

Unresolved shareholder disagreement, unclear ownership/votes, unacknowledged founder dependency, promises incompatible with the transaction, no designated spokesperson, undocumented mixing of family and business economics, or negotiations started before authority is clear.

DealPME mapping

P01/P04 structure identity and seller file, P06 preparation/institutional certification, P07-P10 staged presentation/disclosure, P11-P12 NDA/VDR, and P14-P16 negotiation/completion. Family ownership and governance decisions remain with shareholders and advisers.

Sources and limits

This playbook addresses governance and transaction preparation. Personal inheritance, matrimonial, donation, tax and title-transfer rules vary by country and family situation and require specific professional advice.

This resource explains; it is neither legal, tax or financial advice nor a formal valuation. Have your situation validated by a professional.