Do you have a succession plan in place for your business?

So … it turns out the Murdochs aren’t alone when it comes to succession headaches.

Latest family business data from KPMG shows that just 17% of Australian family businesses have a documented succession plan to safeguard the longevity of their business.

That means a whopping 83% of businesses intend to wing it and do it on the fly.

Fortunately, the newly released ‘Introductory Guide to Family Business Succession Planning’ provides a step-by-step guide to passing the family business on to the next generation.

“Succession planning can be challenging,” Family Business Australia (FBA) CEO Greg Griffith says.

“But with the right approach, supported by quality information and advice, you can achieve rewarding outcomes.”

Why it’s important to have a plan in place

Australian Small Business and Family Enterprise Ombudsman Kate Carnell says there has never been a more important time to initiate a succession plan, given the highest proportion of business owners are aged between 45 and 59 years.

“Australia’s most successful family business stories – and there are many – are a result of well-executed succession planning,” Ms Carnell says.

“More than 60% of employing small business owners are approaching retirement age. This generational shift presents a number of challenges for the sector and the economy more broadly as some business owners may find it difficult to attract a buyer.”

Mr Griffith adds the easy-to-read guide offers tips on how to handle the kinds of tense conversations that can occur between family members throughout the transition phase.

“The key to families working well together is to have really open and honest communication – which can be difficult when your boss, colleague or direct report is also a member of your family,” Mr Griffith says.

“Our succession planning guide offers practical tips to ensure an orderly transition process.”

Understanding your family business’s finance situation

One critical area highlighted in the guide is the importance of your successor understanding your family business’s finance situation.

“You may also want to engage people outside the family and the business. In our experience, businesses can benefit from guidance from advisors in areas such as business finance: to understand the nuances of your family and business finances,” the report states.

Now, we understand that money and finances can be a difficult subject to discuss with family members.

So if you’re thinking of passing the baton to a family member – and you’d like help bringing them up-to-speed on your business’s finance obligations, opportunities and outlook – then please get in touch today.

We’re here to help your business succeed now, and in the hands of the next generation (engage!).

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.