6 May 2008

As the majority of baby boomers retire over the next five to ten years, business succession will be vital for the long-term survival of many family-run businesses according to Deloitte partner, Craig Holland in his recently published book titled The Art of Business Succession.

According to Mr Holland however, fewer than 30% of family businesses have an achievable succession plan in place creating the potential for many Australian businesses to fail with significant damage to the Australian economy.

"A good succession plan will look at a range of issues such as people, and talent, family dynamics, corporate structure, estate planning, insurance and share transfer to name just a few,” Mr Holland said.

Perpetuation of a business legacy is also one of the overriding goals of business owners when developing a succession plan.

“This is important for family-owned businesses where the patriarch or matriarch expresses a strong desire to have sons or daughters assume control of the family business and continue the legacy into future generations,” added Mr Holland.

“Management-succession planning requires contemplation of one’s own mortality which is unpleasant, leading to many business owners choosing to do very little formal planning when it actually comes to selecting and grooming successors.

“Responsibility for grooming the next generation belongs to the senior business owners. Ultimately they must name the next CEO of the company.

“A pivotal time in the grooming process for the successor will come with the move into an executive position where an entirely new set of skills needs to be honed and acquired.”

Succession planning is more complex than ever with many different businesses, financial and personal issues coming into play. This book is designed to guide business owners through a comprehensive and strategic approach to the business succession process.

Craig Holland
Deloitte
Partner
+61 (0) 3 9208 7586