How prepared are you to take on the top job?

Do you aspire to become the owner of the company you work for? You may work for a small to medium-sized business and are told that if you keep on delivering like this, you will get to take over when the boss retires.

Or you may work for a much larger organisation where there is the possibility of a management buy-out or buy-in at some point in the future.

You know your job like the back of your hand but could you run the company? You wouldn’t contemplate running a marathon without training. If you would like to own (and run) the company, you need to get yourself fit for it in advance.

The positions of employee, shareholder and director are separate things. I often describe them as being like three hats. In owner-managed companies, the owners wear all three – they do the work (employee), they run the company (director) and they own it and get paid dividends from the profits (shareholder).

The hats are all piled on top of each other and it can be difficult to see which is which. In other companies, you may wear only one or two.

As employees rise through the ranks, they are often given the title of “director” but are not actually statutory directors, registered at Companies House and subject to the duties imposed on directors by the Companies Act 2006.

Anyone aspiring to becoming a statutory director and getting a seat on the board needs to get to grips with the duties imposed by law on directors.

Get it wrong and (worst-case scenario) you can end up personally liable for the debts of that company.

Being a director is like being the parent of your company. The buck stops with you. So you need to understand what the law requires of you and also where you may need to enhance your skills and knowledge to comply with your duties.

Being a shareholder doesn’t automatically come with a load of duties and responsibilities. However, lawyers usually write those into shareholder agreements and they also tie the three hats in together – take any one hat off for any reason and the other two automatically get yanked off under the terms of the agreements, whether you like it or not. Part of the preparation for becoming a company owner is getting your head round legal agreements.

I know they can be pretty dull but, believe me, they’ll get easier if you put in the effort.

Accounts and finance are crucial too. Your boss is not going to hand you the keys on their way out the door on the day they retire. They are going to want payment for their shares.

You are going to have to understand how you are going to raise the money to pay for the shares and how you are going to keep the business running profitably. You need to learn to love profit and loss statements and balance sheets.

And over and above legal and accountancy skills, do you have the leadership and development skills to take the company forward?

Do you need a plan to make sure the skills you are developing in your current job are those you will need for the job you aspire to?

Do you need some additional external learning and coaching to supplement those skills?

Finance Wales is running a discussion event on May 18 about these topics.

I am speaking, together with Seamus Gates of Broomfield & Alexander and Annie Thompsett of Compass Coaching & Consulting. Clive Hamilton group managing director of Pinnacle Document Solutions, is the keynote speaker, talking about his experiences of having successfully completed a management buy-out of Pinnacle in 2015.

If you are an owner or a management team interested in these topics, please register your interest by emailing joanne.o’keeffe@financewales.co.uk

Bethan Darwin is a partner at law firm Thompson Darwin.