Family Business Transition Management

 

With over 60% of small business owners intending to leave their businesses in the next 7 years and 75% of these being a family based business, real issues are facing the owners of these businesses.

Who should take over the business and on what basis is this to occur? The concerns to be faced by family business owners are quite different to publicly owned businesses. At the same time there are also a number to be faced in common.

The issue that set family businesses apart centre on dealing with the 'family systems' that exist within the business. This is unique and requires particular attention by the family as a whole when the owner is wishing to pass the business on.

The owner of the family business has three (3) main options when contemplating an exit strategy:

1. Retain family ownership and management control
2. Retain family ownership and not management control
3. sell the business to a third party

The approach we taken with family business owners in this situation is to work with the family as a whole and initially focus on the 'family issues'. Until these can be identified, discussed and resolved, there is no point in moving forward with examining how to prepare the business for transition and the associated 'business issues'.

In working with the family we identify potential points of conflict and mis-alignment of expectations and resolve these through developing appropriate strategies for opening up improved communication within the family group.

A family business is one where the majority of shares are held by the members of a family and where that family is working in the business.

Business Exit and Succession Management

 

Once a Family Transition Plan has been completed or, in the case of a publicly owned business, once a decision is made to when the owner would like to exit from the business, development of the Business Succession Plan should be commencedalong with a Business Exit Plan.

Whereas the Family Transition Plan relates to the transition of ownership and/or management within the family, the Business Succession Plan relates to the transfer of the business from one leader to another. A Business Exit Plan relates to the transfer of ownership or equity in the business to a third party. These plans are about preparing the business and as such is equally relevant to both types of business ownership.

Our intention is to work with our clients in identifying how to best prepare the business for change of ownership in order to achieve the following outcomes:

• The present owners are able to realise a maximum return on their investment in the business when sold

• We position the business most favourably to the market

• With the succession of new ownership and management there will be minimal disruption to the staff and customers

The above outcomes are achieved by Superb Coaching through implementation of seven (7) key strategies for our clients:

1. Developing appropriate strategies and plans
2. Putting in place the right organisational structure and culture
3. Establishing a framework of roles and responsibilities fit for the business and embodied within relevant Job descriptions with performance expectations
4. Ensuring business systems support the business operations
5. Having a workable set of documented processes supporting staff driven by performance accountability
6. Establishing effective distribution models for your market
7. Positioning the business successfully in the market.