INTHEBLACK October 2021 - Magazine - Page 64
P U B L I C P R A C T I C E F E AT U R E
// S U C C E S S I O N P L A N N I N G
Below: Craig West,
Succession Plus
FIRST STEPS
Leadership skills development and peer-to-peer
support are critical to succession planning, and
FBA helps SME owners develop both.
One of the key recommendations in the
KPMG and FBA survey report is to set up a
family council, separate from a board of directors,
and ensure good communication between the two.
A family council can guide and set rules around
family values and engagement, participation and
recognition as a way to reduce the likelihood of
conflict. A strong communication framework
acts as a forum to talk, listen and share
intergenerational perspectives across areas such
as future growth and transition strategies.
However, not every family business has
children willing or able to take over the helm.
Stephen Jones, adviser with Succession Plus,
says there is no point trying to coerce a family
member into the role if they don’t want to do it.
Equally, some business owners take the opposite
view, insisting that their children gain some
life experience outside the family business first,
before being considered for succession.
“I remember a CEO saying to me he wouldn’t
let his kids work in the business until they had
64 ITB October 2021
gone and found their own pathways. If they
came back to the business and were interested in
taking it on, then he said they were meant to be
there,” says Jones.
SELLING UP
Almost half of small business owners surveyed
by KPMG and FBA see themselves working in
the business beyond 65 years of age, with over
30 per cent saying they would be relying solely on
the sale of their business to fund their retirement.
The problem for many SME owners is that,
when they make a decision to sell, they do not
have a business that is exit or sale-ready.
A family business owner’s life, business and
wealth are frequently interwoven, and they are
not easily separated. To decouple the business
from the owner, so that it can stand on its own,
takes time.
“We find there is often no discipline or
structure around financial management,
because family members wear multiple hats,
so it’s all blended,” says West.
“Unfortunately, when it comes to a buyer,
what you see from their point of view is a very
confusing picture, and that equates to high risk.”
CLICK HERE
TO ACCESS
CPA Australia’s
Asia-Pacific Small
Business Survey
CLICK HERE
TO BORROW
Effective Succession
Planning from the
CPA Library