Article by Richard Mackenzie
What is Business Succession Planning?
Business succession planning is the pro-active planning by the current business operator and the next generation business operator, to ensure the continual success of the business as it passes smoothly, through the various generations.
Why do I need it?
To seek the transfer of the business, with minimal disruption to the business, by grooming the successor to take over, at a suitable time. Such planning must take into account all relevant legislation, especially Taxation & Superannuation.
My children know what to do, and I have a will, isn’t that enough?
No, successful planning involves the whole family unit in order to carefully consider the real estate assets, the business structure, the tax and stamp duty implication, the personal and family factors. Not only should the planning involve the business continuation, financing, but also your retirement needs.
It won’t happen to me
No one is invincible, look around your own peers who own businesses and you will no doubt find a large proportion of horror stories which have divided families and driven successful businesses into ruin.
What do I need to do, and when?
Succession planning should be carried out in conjunction with your legal, accounting, financial and insurance advisors, and of course your family. It is a slow and gradual process which requires constant review having regard to what stage in life the current business operator and his/her successor is at and other relevant factors regarding the business itself and the family.