Family business owners in Australia are the unsung champions of our economy and lead over 85% of all businesses in Australia.
There are thousands of family members operating successful businesses every day employing vast numbers of Australians. They do not seek publicity or media attention and are considered by many to be the best kept secret in business success.
Generally, families put their personal assets on the line and don't look for Government handouts all the time. They work hard, always see a positive way forward, they have genuine core values and a passion to create and build wealth for future generations.
However, families in business face unique challenges in 2019 due to the fact that many are owned by Baby Boomers who are now in their sixties and beyond. They are looking for a way to exit their company or hand over to the next generation for a safe retirement.
For many that requires a succession plan or an exit strategy. It also requires ensuring the leadership skills of whoever is going to lead the business into the future are understood.
Family companies are also known for being driven by emotion and for having difficulty with issues and conflicts around handing over control to the next generation. There is often a gap in any effective communication on the issue internally.
I find that the best solution for families in business is to facilitate internal conversations with individual family members and with all family members together. Recent research by PwC and highlighted by David Smorgon proves that inter-generation conversations in family business are few and far between
MY FAMILY BUSINESS SUCCESSION STRATEGY
This family succession package will quickly discover and highlight the issues, conflicts and emotions that need to be acknowledged by all family members to ensure the family has the confidence to commit to solving the family succession issue.
What you learn from this will surprise you. However, experience has shown me that the family is generally in a better place to accept open and robust discussion, trust of family members and a shared desire to work together taking a long-term view to improve the future success of the family business.
There are five important and tested key steps to this process:
1. First meeting with the parents/family leaders
It is essential to explain the process and gain your trust in knowing that I can add value to the family and the business. Opportunity to ask lots of questions and clarify any issues. Also clarifies the future family business vision.
2. Meet with all family members individually
One-on-one meeting with each family member that is confidential. This provides me with a real understanding of the issues. I often find there are many differing perceptions of the issues within the family group. This is due to the reluctance of the family to have open and frank discussions regarding the business and its future. I also reinforce their comments with a confidential online questionnaire to again, highlight individual issues.
3. Whole of sibling/cousin meeting
I facilitate a meeting with all next generation members present. We map out the common issues and gain agreement from the group on a senario based on them owning/ managing the business at a point in time in the future. This starts the development of a family charter or what I call 'The Family Rules.' The charter details how family members agree to conduct themselves and the behaviours that are not negotiable as a family owning and operating a family business.
4. A second meeting with the parents/family leader
At this meeting I will brief you in detail on the outcome so far and provide a draft report and recommended plan to engage all family members and facilitate the next step.
5 Whole of family meeting
This is the critical link in the succession planning process. This is the meeting that, according to family business research from around the world, says is most neglected. It requires an external facilitator to ensure no one person dominates and the emotions in the room that are sure to be exposed and are handled professionally with respect for each individual. Everyone has a right to state their opinion and has a right to be heard.
From here I document the outcomes and provide provide a recommended strategy, an action plan and time line for the family to implement.
Using examples of past succession projects with families in business I can assure you this process with change the dynamics within the family business, clarify any differing perceptions that may have been in place and create a better understanding of an agreed purpose of the family business.
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