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Series - Succession Planning, Retirement and Superannuation – 8 Steps to Succession Planning

PlanningThe evolving landscape of family Businesses was recently revealed in an Australian Family Business report, highlighting succession planning and generational differences as key matters.  

It highlighted delayed transition into leadership with both generations concerned about each other’s readiness for the changeover, along with mindset differences across generations. 

Mindset shifts translate as priorities differing across generations, with incumbents focused on risks and operations, while the rising generation emphasises family dynamics. The next generation is keen to lead and take up the challenges.  

Additionally, Technology and AI are major factors reshaping decision-making and operations.  Incumbents can be cautious while the future younger generation openly embraces change.    

Are you a Family Business?  

Do you relate to these insights and findings? If so, how well-placed and prepared are you for succession, leadership transition and plans that support long-term growth? 

Somewhat, not at all, feeling overwhelmed and unsure how to get started! 

This leads to the importance and necessity for proactive Succession Planning. 

Why is it so Important? 

  • It Protects Business Value 

  • Supports Business Continuity 

     

  • Fosters Family Relationships 
  • Aids Retirement Planning 

  • Builds Employee Confidence (family & non-family staff) 

  • Underpins your overall Business Strategy 

What does a Succession Plan look like, involve? How do I go about it? 

These are 8 Steps to start Succession Planning for your Business. 

  1. Set your Succession Goals – determine who will you pass the Business to: a family member, an external buyer, or a partner.  Establishing this step shapes the rest of the planning process. 

  1. Identify Key Roles & Players – Identify the key roles and assess who is in the room that can or can’t fill them.  Are there potential candidates that can be groomed or trained? If no one internally can fit the responsibilities, consider recruiting externally. 

  1. Document Structure & Ownership – Record these details. Is your Business a partnership, sole trader or company? Are there Shareholder agreements? These details are needed to assist with how control and assets can be transferred.  

  1. Update or prepare Legal Agreements – Consulting a Lawyer is suggested. You might need to help prepare or update crucial documents such as power of attorney, wills, partnership agreements etc.  

  1. Financially plan for the Transition – Seek advice from your Accountant or engage one.  Blackburn Accounting can help with tax matters, superannuation etc. We are your family Business specialists offering a range of services, including Business Management, Cashflow Management, and Retirement Planning.  

  1. Share your Plan – communicate with relevant others, those concerned who need to know. This helps avoid misunderstandings and better manage expectations. 

  1. Start Building Bridges – next, acknowledge and recognise if there are generational differences in leadership and Business thinking. Be proactive. Take steps to foster better understandings to harness the benefits and strengths of both to continue and successfully take the Business into the future. 

  1. Review Your Plan – Don't prepare and forget. Regularly review and update as your Business and personal situations can change over time. 

Watch for our next article 'the Problems of Not Planning'