Succession Planning
Issue 0054
How diligent are you about your succession planning?
Do you know that, in various surveys that have been conducted by MYOB, CCH, Smithink and other companies over the last 15 years, succession planning has been identified as a very important process from a small/medium enterprise operator's point of view? Are you getting the assistance you require for your succession or exit planning as it relates to your business? Are you talking to your accountant/advisor about providing those services?
Accountants have access to a range of products that we have produced, to enable them to assist you in your succession or exit planning. We believe that it's very important that the accounting profession is able to support you in this very important activity, so the package which we've produced includes questionnaires for the owners, CEO, management team, directors and the employees (the team that is doing the work) to get their input as to what they believe should be happening in the business.
The package also includes questionnaires relating to the business and succession issues and whether you're going to have enough money to retire. This includes a personal due diligence checklist for you to work through.
The material also includes articles on the concept of a Family Charter or Constitution. Many family businesses in Australia have Family Charters or Constitutions and this helps to give some guidance to the management team running the business as to how they should relate to the family, especially in businesses where the family is not all directly involved in the day-to-day activities of the business.
From Family Charters and Constitutions has come Family Councils that some of the major business families in Australia have instigated for their businesses. Quite a number of small businesses have also formed Family Councils. This allows a forum to exist between those family members who are not involved in the business on a day-to-day basis to be able to get some communications, some feedback, and some idea of the strategies that management is using within the business.
Is this the type of service that you're looking for from your accountant/advisor to assist you in planning your succession?
Incidentally, please remember that succession is not just for the owner or CEO. Succession planning should be implemented in a business for every position within the business because businesses should be continually looking to see who can replace someone so that a person can be promoted, so it’s the ongoing commitment to staff training and development that is also a very important component of succession planning.
