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Welcome back everyone. In the sixth and final part of my blog series, I want to discuss something that affects all of our financial journeys: Superannuation. Perhaps you’re concerned about your retirement savings? Or maybe uncertain about how to make the most .....
Strategy, Business, Business Succession - 5 min read
So Dad’s handing down the reins to you! If you grew up around the family business, you may be well acquainted with many of the aspects of how it runs. You may have worked at the business from time to time, or even be in the leadership team at present.
Being a successor can be difficult for several reasons, but it’s also an exciting opportunity to tackle new responsibilities and ensure a successful future for the business. In this blog post, we’ll look tips and advice to help you succeed as a business successor.
Assuming a deeper involvement in the business as soon as possible can put you in great stead for when the transition of ownership occurs. Remember that the business owner, your Dad in this instance, may have a difficult time stepping back completely. But for you to truly take the reins, you will need to learn how to make consequential decisions yourself.
The more training you acquire before you become the official successor, the better off you’ll be when greater responsibility falls on your shoulders.
It’s helpful to create a formal business succession plan that outlines your training, a succession timeline and other important factors. You should be involved in the planning process as much as you can. If you have questions or concerns along the way, it’s important that you contribute to planning discussions. After all, the future success of the business can be affected by how smoothly the succession proceeds.
Even with careful planning, you’re bound to face some hurdles along the way. If you’re aware of potential problems, however, you can minimise their impact on the business and on your career. Let’s take a look at some of the more common succession planning problems and what you can do to avoid them.
Whenever relationships change, it’s possible for misunderstandings and friction to occur, and this is certainly true with business relationships. As the son or daughter of the previous owner, you may have forged relationships with people in the business, and they might have a hard time accepting you as the new owner. It’s possible that some of these people watched you grow up, and they might still view you as an inexperienced youth.
Minimise business relationship problems by staying focused on business vision, goals and teamwork. Be humble, take correction and own up to your mistakes. If contentions arise, bring the issues into the light as soon as possible, and talk through them openly and honestly.
One of the most common succession problems is that the next generation is unprepared to “receive” the business. This can happen for a variety of reasons. Sometimes a business owner passes away unexpectedly or becomes ill or disabled before he or she planned to retire. This is why it’s important to begin the business succession planning early. If you’re the successor, give yourself every opportunity to learn about the business and start preparing early.
Financial responsibilities can be an area the next generation is often unprepared for in transitioning ownership. Understanding the numbers and what their impact to the business can be key to success and managing financial risk. This may be a steep learning curve for some, but you can always get help from specialists like ourselves with outsourced CFO services while you are finding your feet.
The person who built the business (your parent) began the business with a vision in mind. That vision likely drove all kinds of decisions that have shaped the business into what it is today. For instance, the business’ structure may have been deliberately decided based on long-term plans, and certain people were hired because they brought skills and attributes to the business that would assist in the realisation of its vision.
If you as the successor do not understand that vision, you could undo some of the efforts that have been years in the making.
For more information about business succession planning, get in touch with us at Altus Financial. We can help to guide you through the entire succession process, providing an expert third-party outlook to the transition.
Set your business on the right path with this simple guide.
Make sure you’re on the right track with this online checklist.
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Altus Wealth Pty Limited ABN 55 649 956 212 is an Authorised Representative of Altus Financial Services Pty Ltd ABN 24 637 026 825 an Australian Financial Services Licensee (AFSL no. 520266). Altus Financial Services Pty Ltd is not responsible for the advice, products and services provided by Altus Accounting. Julie Azzi is a credit representative (CR No. 366834) of BLSSA Pty Ltd ABN 69 117 651 760 (Australian Credit Licence 391237).
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