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Family Business Succession: “One day, it will all be yours” but it won’t come easy

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Family Business Succession: “One day, it will all be yours” but it won’t come easy

By , September 6, 2021
one_day_this…family_succession-small

Probably the most dreaded phrase in family business succession planning; at worst a hollow promise to hand over the reins/give up control and transfer ownership, and at best, a hope that it will all magically get sorted.

Smoothly handing over control and ownership of a family-owned business is every family’s dream, but if you look at the Business Succession stories of some of our best-known families you will see tears, drama, court cases and the erosion or loss of business value.

The three-circle model of family business goes part way to explaining the issues which arise when people confuse roles – owner, family member, employee, and in some cases all three – but it doesn’t explain the underlying cause.

 

Three circle model of family business

 

Lots of time in Business Succession and Exit planning is spent managing the process – how, but nowhere near enough time is spent upfront understanding the various drivers and goals of the participants – the why.

Step 1 in our 21-step process is all about why – goals and outcomes – why are we transferring control, ownership, income, equity, and what outcomes are we seeking from the succession process we are about to embark on?

I have written before about role-identity fusion and this is significant for family business owners – their identity is intrinsically linked to the business and the owners’ sense of purpose / their contribution to the world and their family is also linked back to the business. Separating the owner from the business is never easy.

In order to get the best result, you need to focus on three key things (apart from remembering that why is just as important as how) –

1. “Begin with the End in Mind”

2. Start as early as possible

3. Get good advice/advisers

 

See our Family Business Succession Webinar for more.

Craig West

Craig West

Executive Chairman | Succession Plus

Craig West is a strategic accountant with over 20 years of experience advising business owners. His background as a CPA in public practice has provided invaluable experience in the key issues of concern to business owners.

In March 2014, Craig was appointed Executive Chairman of the SME Association of Australia, Australia’s largest small business organisation representing over 300,000 business owners.

In October 2014, he was awarded the Exit Planner of the Year at the Exit Planning Institute Annual Conference in Texas, USA, due to his innovative development of an exit planning process to help business owners maximise business value and achieve a successful exit.

Craig’s proprietary structure - a Peak Performance Trust - has won the Australia-wide award for the Employee Share Ownership Plan of the year twice in four years.

In November 2018, Craig launched SME Experts in partnership with Mark Bouris’ Mentored on Podcast One and quickly grew the monthly podcast audience to over 26,500 downloads; in October 2019, he released a new podcast focused on medium-sized businesses - Mid-Market Matters.

In July 2021, Craig joined the NSW Committee for STEP (Society of Trust & Estate Practitioners) – focusing on advising families across generations.

Craig has also launched a SaaS platform, Capitaliz (which captures the 21-step process), to assist other advisers internationally deliver advisory services at scale.

In November 2021, Craig was appointed Executive Chairman of NSW Leaders, a business mentoring group for leading NSW businesses.

In July 2022, Craig West received the award of Doctor of Business Administration for his research thesis titled “Examination of the key factors driving business exit options in Australian Small and Medium Enterprises.”

Craig is passionate about encouraging business owners to think strategically, maximise the value of their business and achieve a successful exit.

Looking to sell your business?
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If you would like to discuss your business succession or other matters further, please get in touch to arrange an obligation-free 30 minute appointment with a Succession Plus adviser.

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