It is not uncommon for the founders of a family business to find it difficult to let go. After all, they spent years of hard work, dedication, risk and passion to build the business, often viewing it as an extension of themselves.
FBA Specialist Accredited Advisor, Suzy Munt often gets asked “what will I do without the business?” or “how will the business perform without me running it?”. These questions can deter founders from addressing the topic of continuity planning and often creates conflict between them and the rising generation. Suzy discusses ways you can overcome these conflicting emotions during the succession process.
Welcoming the next generation
In many instances, founders make repeated promises to retire and invite the next generation leader to take over the family business. Then both generations, motivated by good intentions, engage specialists for corporate governance to help professionalise the family business and ease generational transition issues.
Everything looks positive until the founder struggles with the reality of delegating authority to the next generation leader. Undoubtedly, founders make a conscious effort to hand over the reins, but the conflicting emotions of doing so make it a challenge.
These emotions not only put a strain on parent and child relationships, they can also instigate the downfall of a long-standing family business. As the next generation comes into the business, they are eager to prove themselves in doing things differently, bringing onboard innovative ideas and changes to the organisation and striving to generate profits. If they are constantly challenged and frustrated by the founder’s intrusion and lack of confidence in them to have the freedom in running the business, it can cause tension.
Achieving a smooth transition
Continuity planning takes years, not months. Educating the next generation with the right skills and knowledge and creating a roadmap for continuity, increases the opportunity to drive business longevity and wealth preservation.
We understand the unique challenges of running a family business. Our family business advisors draw upon their extensive education, research and accreditation to help you navigate challenging circumstances. If you would like to discuss your unique situation, please contact Suzy Munt, BDO Family Business advisor.
If you are ready to deep dive into succession planning for your family business, learn more about our Succession Planning for Family Business course here.
About Suzy Munt
Suzy is an Associate Director of BDO (QLD). Suzy helps clients solve problems and grow their business by holistically reviewing their business and focusing on strategic outcomes. She provides consistent, professional and timely advice, ensuring her clients get the best outcome for their current needs.
She has extensive experience in many aspects of taxation laws and provides advisory services to clients from a broad range of industries with a special interest in manufacturing. As an FBA Specialist Advisor, she helps family businesses with intergenerational wealth transfer, family charters, succession planning and general business advisory. She has a special interest in the manufacturing sector and has recently helped a number of manufacturers with cost modelling and business improvement.
Disclaimer
The views expressed in this content are those of the author, who is also responsible for any errors and omissions. Family Business Association provides this article for your information only. The content of the article should not be taken as advice. If you wish to explore this topic, please consult an advisor who you consider to have the expertise to provide specific advice in relation to your family business.
