“How do we begin planning for the transition of ownership, roles and responsibility within our family business to the next generation?”
As advisors, we begin the transition process by working with the family to develop a succession plan. Our plan will initially focus on the family, investing time to engage with the family members, built trust and collaboratively work towards agreed-upon milestones.
Family Engagement and Family Meetings
We meet with the parents, followed by individual meetings with each family member, and then a group meeting with all family members. The group family meeting brings everyone together, allowing the parents to share their story, discuss the business, and provide each family member with an opportunity to speak respectfully. This fosters trust and encourages open and transparent communication.
This process requires time, meaningful engagement and may include collaboration with specialist advisors. To give the plan the best chance of being executed successfully it is best to start the process early.
Ownership and Roles in the Business
Ownership of the business and roles within the business can be considered independently. The succession plan should identify the key people currently working in the business, which next generation members are interested in working in the business and/or becoming owners of the business. Further, the plan will include a role transition strategy and support for family members.
As part of this, we conduct a detailed review of the business structure, ownership arrangements, and tax review of the business structure and all related family entities. This enables us to create a plan to transition the ownership of the business to the next generation. This process may involve a business valuation, valuing other family assets, a staged purchase of the shares in the business by the next generation, asset equalisation advice, wealth structure planning and a detailed estate plan. We collaborate with specialist lawyers and wealth advisors to ensure that the plan is comprehensive, tax effective and aligned with the family’s long term goals.
Family Charter and Family Meetings
Creation of a family Charter outlines the values, vision and guiding principles for the family and future generations. Family meetings provide an opportunity to create a planned and structured environment to discuss the business and the family wealth.
In our experience working with families, a collaborative approach, bringing together trusted advisers such as lawyers, wealth advisors and other specialists, leveraging everyone’s area of expertise consistently creates better outcomes for our clients.
By VIC based Family Business Accredited Advisor
Joelle Tabone
Partner, HLB Mann Judd, advisory and accounting
