These case studies have been provided by Hood Sweeney. While based on real scenarios across various industries, the names of individuals and businesses have been changed to protect privacy.
AutoStore: Growth, Legacy, and Financial Strain
Bob and Helen founded AutoStore 40 years ago, starting as a solo mechanic business before expanding to include auto parts, a car wash, and even a takeaway food service. Their son, Jason, and son-in-law, Craig, took the reins, driving the business with ambitious growth plans.
Bob and Helen had long retired but continued to receive a third of the company’s profits, seeing it as their retirement fund after reinvesting all their savings into the business. While they were proud that both their children and grandchildren were working in the family venture, tensions grew. The three-way partnership, which still included the retired founders, strained financial resources and hindered expansion. Distributing profits to non-working partners impacted cash flow, and concerns about future control and borrowing limitations frustrated Jason and Craig. Without a clear succession plan, the business faced an uncertain future.
Maria’s Gourmet Market: A Family Divided
Maria’s Gourmet Market thrived for 48 years, growing from a small delicatessen in Tony and Maria’s home into a well-established store with prime retail space, all funded by years of tireless effort. The couple’s three sons—Roberto, John, and Lou—benefited financially from the family trust that owned the business, but only Roberto worked in it full-time, effectively managing it as their parents aged.
When Tony passed away, Maria became the new trustee, with all three sons remaining beneficiaries. Roberto assumed he would continue managing the business and expected first rights to ownership or at least a larger share of the profits. However, Lou, who had worked elsewhere, expressed interest in joining the business, while John, content with his own career, insisted on maintaining his equal share of profits. Maria, honouring the family’s longstanding values, insisted on treating all three sons equally. With no clear succession plan, differing expectations threatened to destabilise the once-thriving business.
Carmen’s Hardware Empire: Leadership and Misplaced Assumptions
Carmen built his hardware business from a small storage shed into one of the largest regional franchises of a national chain. He had two stores, each managed successfully by his trusted employees, John and Craig. Passionate about his family, Carmen hoped his children would continue his legacy but never pressured them to do so.
His eldest son, Mark, chose to join the business after finishing school. While Carmen was pleased, he didn’t assign Mark a specific role, assuming he would learn the business naturally. Mark, however, believed he was being groomed to take over and began issuing orders, often undermining John and Craig. As tensions mounted, the experienced managers found themselves resolving unnecessary conflicts. Despite their concerns, Carmen reassured them that Mark just needed time. Misinterpreting this as validation, Mark continued asserting authority, leading to frustration among staff. Within a month, both John and Craig resigned, leaving the business in a precarious position.
The Common Thread: The Cost of Poor Succession Planning
Each of these businesses had strong foundations, but their lack of clear succession plans created instability. Whether it was financial strain, unbalanced expectations, or leadership conflicts, failing to plan for generational transitions put their futures at risk.
A well-structured succession strategy could have ensured smoother transitions, protected financial stability, and preserved both family harmony and business longevity. These cautionary tales serve as reminders that successful businesses require not simply hard work and dedication, but also careful planning for the future.
Here are some of the things every family business should be thinking about right now, and talking to their trusted advisors about:
- Prioritise family discussion and communication - engage in open conversations with all family members whether involved in the family business or not, while addressing concerns, expectations and roles during any succession or transition.
- Explore the transition options - consider the impact on family dynamics and business operations.
- Start early - plan well in advance and allow time for alignment, trust building and effective implementation.
Hood Sweeney is a South Australian professional services firm with more than 46 years’ experience. With 140 staff in Adelaide and regional offices in Clare, Whyalla, and Kadina, Hood Sweeney serve more than 3,000 clients, including family businesses, small-to-medium businesses, and professionals. They provide Accounting & Business Advisory, Financial Planning and Finance, Technology Services, Marketing, and a range of consulting services for growing business, through Blue Jam, https://www.bluejam.com.au/. Hood Sweeney's vision is to be the pre-eminent integrated services firm for family businesses and professionals in their areas of industry specialisation, which include Agribusiness, Food, Wine & Hospitality and Healthcare providers.
