Making decisions about the future can feel overwhelming, seemingly not important, or just not top of mind when the day-to-day gets in the way. But deep down we know it’s important to plan and prepare for what’s next. We contribute to Super for our retirement, purchase travel insurance before heading overseas and write a Will to share our wishes with family. Planning ahead is part of the human condition.
The same principle applies to family businesses and enterprises. Have you discussed your business's future? Have you worked through who will take over leadership? Are they prepared to take over? Is everyone aligned on these decisions?
“We often see people joining Family Business Association looking for guidance on succession, which is why we provide courses and resources on the topic to help these families understand the process and work through any challenges,” said Family Business Association (FBA) CEO, Catherine Sayer.
Having a well communicated, well documented succession plan is essential to answer these questions and ensure a harmonious family environment. A succession plan outlines who will take over the family business, how the transition will occur, and the structures and rules that will guide the process.
Despite its importance, succession planning is frequently neglected. Matthew Bartemucci, Director at Hood Sweeney and FBA Family Business Accredited Advisor, says "Many current operators are consumed by the demands of running the business. Succession planning often gets pushed aside because the immediate priority is keeping the family business running. As a result, we see many Family Business Owners continually tell themselves they’ll address it later, but later often comes too late.”
Many business leaders aim to pass their businesses to the next generation, but there is a significant disconnect between intention and preparation. Our 2025 Family Business Barometer Report, a joint initiative with Pronto Software, found that while 45 per cent of respondents nominated a successful exit strategy as a long-term goal, only 23 per cent have a formal succession plan and 37 per cent acknowledge the process is complex. These figures underscore the need to move succession planning from the bottom of the to-do list to the top.
We understand these challenges at FBA and offer the resources to help you through this process. Many families are hesitant to seek external advice, yet objective, independent guidance can make the process easier and more rewarding. FBA’s Accredited Advisors truly understand the challenges of family businesses and complete tailored training to provide advice specific to the issues, nuances and advantages of family business.
In this article, we will explore four key areas for effective succession planning in your family business: plan early, communicate, document the process and prepare the next generation.
Plan Early
Starting to plan early gives your family business or enterprise time to approach succession thoughtfully, rather than reacting under pressure. It is recommended to start as early as 10 – 15 years before the intended transition will take place. Early planning safeguards your business in the event of unexpected circumstances, such as the sudden passing of a family member.
Give your family the room to consider different paths. Many businesses will stay in family hands, while others may be sold if circumstances or aspirations shift. Survey respondents reflect this diversity with 42 per cent planning to pass the business to the next generation, while 45 per cent intend to prepare for a sale or exit. Starting early helps you explore these options openly, rather than making rushed decisions in a crisis.
If deciding to keep the business, you’ll give yourself the time to identify potential successors, whether from within the family or outside the business. This enables targeted training and development, ensuring that the person or people stepping into leadership are prepared to take on their responsibilities effectively. It also provides an opportunity to establish rules, processes and governance structures that support a smooth and well-organised transition.
Communicate
Succession touches on family relationships as much as it does business structures. You may worry that raising the topic could spark conflict or reopen old wounds. Yet avoiding the conversation only allows tensions to harden.
The Barometer data reinforces the value of communication. Nearly a tenth of respondents cited sibling rivalry as a concern and balancing family versus business needs keeps 36 per cent awake at night. Open dialogue helps diffuse these issues before they become entrenched and buries the potential for assumptions being made across the family.
Document The Process
One of the most practical and impactful steps in succession planning is documentation.
“I would strongly encourage documentation of everything very early on in the process. It certainly makes life a lot easier for future family members to come in,” Annette Bonnett, Rubix Advisory and FBA Accredited Advisor.
Recording the rules and decision-making practices ensures knowledge is preserved and mostly prevents misunderstandings when leadership changes hands.
Survey results show that formal governance structures remain underused. Less than a quarter of businesses have a documented succession plan and only 31 per cent report having a family charter or constitution. If you don’t document it, you, risk leaving the business exposed, which could escalate to disputes and even legal challenges. Documentation gives everyone a clear understanding of where things stand. It doesn’t have to be set in stone; plans can be adjusted over time, but having a framework is essential.
Some family businesses and enterprises assume that family connections automatically grant entitlement to roles or responsibilities. Addressing these assumptions early through documentation helps avoid conflict within families and the business. Clear governance structures, including detailed position descriptions and defined job responsibilities, not only maintain fairness but can also highlight where external expertise may be needed.
By documenting processes thoroughly, a business provides transparency and clarity for everyone involved. It also supports the smooth integration of successors, ensuring the business can operate effectively, even during periods of transition.
Prepare the Next Generation
Succession is ultimately about people. Giving emerging leaders the knowledge and confidence to take the reins takes time and intent. Provide them with exposure to different roles, encourage formal training and allow them to gain experience outside the family business.
Annette Bonnett advises, “Having discussions with next-generation family members about their progression path in the business is vital. Set a clear development plan that covers governance, financial literacy, operational responsibilities and risk. Measure progress, stick to the plan and recognise this is a journey.”
Catherine Sayer adds, " Succession is about more than who is going to step into the role when the current generation steps down. It is easy to think a few conversations will get succession sorted, but in reality it is a process that takes time, planning and patience, and communication, communication, communication.”
Succession isn’t just about handing over leadership; it’s about preparing the next generation. It’s a long, evolving process that adapts as the business, family and future leaders grow, ensuring they’re prepared to take on the role and lead.
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Family Business Association is Australia’s peak body for family-owned businesses, supporting generations of owners as they navigate important transitions like succession. We offer practical support through our Planning Succession for Family Business, Governance and Directorship courses, and a Diagnostic tool to help you understand where you are in the planning process. The FBA Forum Group Program provides monthly peer to peer support. FBA Accredited Advisors understand the challenges of family businesses and provide advice tailored to succession and other challenges.
We are a community that understands the unique dynamics of family business and can help you learn from peers who have been through similar experiences. We’re here so you don’t have to do it alone.
Either with the help and support of FBA’s community or within your own family and advisory networks, now is the time to start planning succession.
