One of the major challenges for any business is the transition between generations. As the business owner comes to the end of their active career, choosing and integrating a successor is integral to the legacy of the business. There are a number of key issues associated with succession in small business that make it difficult to hand over. With emotion, family, money and planning all coming into play, it is no wonder so many struggle with this aspect of business ownership.
The attachment of a business owner to their life’s work makes objective decision making difficult. Having spent years devoting time, energy and resources to a business, results in significant sentiment for the business owner. Passing the baton does not represent the end of the race; rather it should be seen as having put in the hard work for the success of the next generation and generations to come.
Family is often at the forefront of an owner’s mind when business changes are afoot, particularly in smaller companies. It is not uncommon to consider, how long your family could survive without your income and what other implications handing over the business might impede on them. Naturally, these questions create an additional layer of complexity. However, they are important questions that need to be addressed.
It goes without saying that money is at the forefront of almost all decisions made within a business. After-all, a business is for generating income. When planning, it is important to realise what is at stake and to minimise risk. How much does each party have to gain and how much does each party have to lose?
To ensure that succession in your business is most successful, the nominated successor needs to be clear on and prepared for what lies ahead. This is rarely the case and can result in turmoil without sufficient planning. Talk to us today and start planning for a secure future today. Contact us here, or give the team a call on 07 4078 0900.