BY CHRISTINE VINER
Family owned businesses can be found in all shapes, sizes and industries.
In many ways the family business is like any other business in that it provides products or services, has employees and generates revenue. However, the family-owned business stands unique in one respect – its principals and many employees also share a family relationship.
This family relationship fosters bonds and behavioural patterns that inevitably carry over to the workplace and as a result this overlap and the intertwining between family and business interests and concerns can create special issues which exist only in the family business environment.
One such issue, and one of the most important considerations for family businesses, is that of Succession Planning.
A 2003 study* into Australian Family and Private Businesses found that although 32% of family business owners want their business to remain a family business, only 25% of owners have sought professional Succession Planning advice – figures which support the tendency for many to put it off because of the time and effort involved in reaching the best solution.
The ACT Branch of Family Business Australia (FBA) – a member-based, not-for-profit national network of owners of family business’ and advisors – says that despite every family’s situation being different, the solution to working out a Succession Plan actually comes down to the same core considerations:
. Family business members should be encouraged to express their individual wishes and expectations in an environment which is open and constructive.
. Trust and confidence should be respected by all individual members.
. Short and long term objectives of the business need to be looked at and balanced against the needs of the family.
. Future issues and challenges for the business need to be anticipated where possible – and allow for flexibility.
. All possible options for the business should be investigated including ownership succession or management succession, taking into account the implications and consequences for each option.
. All relevant family members need to agree on the Succession Plan – if everyone cannot agree on a plan within their family, consider using the services of a specialist advisor who can assist with bringing the family together, mediating difficult issues and helping to draw up the succession plan.
More information on Succession Planning for family businesses can be obtained from visiting the Family Business Australia website on www.fambiz.com.au.
BY CHRISTINE VINER