open side menu Navigation

19 September 2016

Succession planning in the ‘too-hard’ basket

A lack of succession planning has emerged as one of the key issues facing family businesses in Australia, following a nation-wide small business consultation conducted by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell.

Marking National Family Business Day, Ms Carnell said despite its importance, the ASBFEO has found that planning for the future isn’t considered a high priority for family businesses, with Australia following a global trend.

“Studies in recent years have shown that as few as 16 per cent[1] of family businesses have something that would qualify as a secure and robust succession process, so Australia certainly isn’t alone when it comes to putting this kind of generational planning off,” Ms Carnell said.

“I know from personal experience though, that as daunting as it may be, having a plan in place for the day you decide to leave your business is one of the most important aspects of your overall business plan.

“Whether you retire, sell-up or have to leave because of poor health, knowing who will take over your business and how, will not only ensure a smooth and hassle-free transition, but will help give you peace of mind that your future – and the future of your business – is in good hands.

“It can be a sensitive issue, so I encourage family enterprises to use National Family Business Day to at least start a conversation about succession, or even better, take that first step and get the ball rolling; I guarantee it will save a lot of anxiety down the track,” she said.

The ASBFEO conducted an Australia-wide consultation earlier this year to hear directly from small business and family enterprise about the issues that are impacting their operations. 

Succession planning was among a number of areas raised, which also included excessive red tape, unfair payment terms, telco accessibility and banking disputes.

Family Business Australia (FBA) can also assist those wishing to develop a succession plan for their business: http://www.familybusiness.org.au

 

[1] PwC Global Family Business Survey (2014)